MUMBAI: The Indian rupee fell on Thursday, weighed down by persistent interbank dollar demand, but pared losses after President Donald Trump said that India had offered a zero-tariff trade deal to the United States.
The rupee closed at 85.55 against the US dollar, down 0.3% on the day but above its intraday low of 85.7225.
The rupee rose above 85.50 in an immediate reaction to Trump’s comments but thereafter bids from foreign and local banks picked up, a trader at a Mumbai-based bank said.
The dollar bids were likely spurred by corporate demand and modest portfolio outflows, the trader said.
The dollar-rupee overnight swap rate also dipped, pointing to heightened demand for cash dollars, which typically indicates a pick up in outflows.
India’s benchmark equity indexes, the BSE Sensex and NSE Nifty 50, rose about 1.5% with sentiment boosted by Trump’s remarks.
The United States is India’s largest trading partner, with bilateral trade totalling some $129 billion in 2024.
Comments
Comments are closed for this article.