Mumbai: The rupee slipped 5 paise to 88.75 against the US dollar in early trade on Friday, weighed down by weak domestic equities and continued foreign fund outflows.
Forex traders said market sentiment remains cautious amid the absence of an announcement on the India-US trade deal.
At the interbank foreign exchange market, the rupee opened at 88.70 before easing to 88.75, 5 paise lower than its previous close. On Thursday, the currency had closed 8 paise down at 88.70.
“Markets are puzzled by the lack of a formal India-US trade deal despite it being close to finalisation. The prolonged wait has kept rupee movement subdued in recent sessions,” said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.
He added that the RBI’s intervention in the bond market to maintain low yields and adequate liquidity is also curbing the rupee’s upward momentum, as the central bank continues to sell dollars to absorb excess liquidity.
The dollar index was trading 0.04 per cent lower at 99.11, while Brent crude futures rose 1.57 per cent to USD 64 per barrel.
In domestic equities, the Sensex declined 284.68 points to 84,193.99 in early trade, and the Nifty dropped 88.25 points to 25,790.90.
Foreign Institutional Investors sold equities worth ₹383.68 crore on Thursday, as per exchange data.
On the macroeconomic front, Moody’s Ratings projected India’s GDP growth at 7 per cent for 2025 and 6.5 per cent for the following year, supported by strong domestic demand, export diversification, and a neutral to accommodative monetary policy stance. The agency noted that while infrastructure spending and consumption remain robust, private sector investment sentiment is still cautious.
