MUMBAI: The Indian rupee advanced on Thursday after five straight sessions of logging losses, as a weaker dollar and bets of central bank intervention outweighed the impact of additional U.S. tariffs.
The rupee closed marginally up 0.06% at 87.6250 against 87.6800 on Tuesday. Indian markets were closed on Wednesday for a local holiday.
The currency had appreciated to as much as 87.5250 in early trade on Thursday before drifting weaker on what bankers said was broad-based dollar demand, as importers stepped up hedges on the conviction that steep U.S. tariffs leave little room for upside for the rupee.
The Reserve Bank of India likely stepped in on Tuesday to curb losses after the rupee came under pressure and dipped to an intraday low of 87.80, when Washington confirmed additional tariffs on Indian goods. Bets of further central bank intervention supported the rupee on Thursday.
“The rupee is expected to face more pressure as risks from U.S. tariffs mount,” said Jigar Trivedi, a senior currency analyst at Reliance Securities.
Impending Trump tariff hike pushes Indian rupee down
Meanwhile, the U.S. dollar index edged 0.16% lower as on 1557 IST, in its third straight session of decline, as investors positioned for a Federal Reserve interest rate cut next month after New York Fed President John Williams signalled a reduction was possible.
The dollar has faced additional pressure this week from President Donald Trump’s intensified campaign to influence monetary policy, including his attempt to remove Fed Governor Lisa Cook and install a loyalist.
Asian currencies gained against a weak dollar with Korean won and Malaysian ringgit leading the advances.
Indian equity indexes, Sensex and Nifty were both down 0.8% on Thursday on the back of weak risk appetite among investors.
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