Mumbai: The rupee fell by 9 paise to 88.77 against the US dollar in early trade on Tuesday, weighed down by the broad strength of the American currency in global markets.
Forex traders said that optimism around the ongoing India-US trade talks was offset by foreign fund outflows and a risk-off sentiment prevailing globally.
They added that the Reserve Bank of India (RBI) is closely monitoring the USD-INR movement as the pair approaches the 88.80 level.
At the interbank foreign exchange market, the rupee opened at 88.73 and slipped to 88.77 against the dollar, marking a 9-paise decline from its previous close of 88.68. On Monday, the local currency had gained 4 paise to end at 88.68.
Meanwhile, the dollar index — which measures the greenback’s strength against a basket of six major currencies — edged down 0.07 per cent to 99.19. Brent crude futures, the global oil benchmark, rose 0.36 per cent to USD 63.55 per barrel.
“The trade tariffs remain the only point of concern for investors at the moment, even as an Indian trade delegation is in the US to continue and finalise discussions,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
A senior official said that a team of Indian officials will visit the US this week for trade negotiations, with talks on the proposed Bilateral Trade Agreement (BTA) progressing steadily.
The two nations had, in February this year, instructed their officials to begin negotiations on the BTA, with the aim of concluding the first phase by October–November 2025. So far, five rounds of discussions have been completed.
Bhansali noted that the rupee’s cautious movement and technical positioning near the 88.80 and 88.50 levels indicate a finely balanced market.
“RBI’s actions and global trade developments will be key in determining the direction of the USD-INR pair,” he added.
On the domestic front, equity markets rebounded in early trade, with the Sensex climbing 246.32 points to 82,573.37 and the Nifty advancing 83 points to 25,310.35.
Foreign Institutional Investors (FIIs) were net sellers on Monday, offloading shares worth ₹240.10 crore, according to exchange data.
