MUMBAI: The Indian rupee climbed on Friday, as a key US inflation data came in line with expectations and reinforced bets that the Federal Reserve will cut interest rates next week.
The rupee ended 0.19 percent up at 88.2750 on Friday from the close of 88.4425 on Thursday - a record closing low.
Friday’s move ended a volatile week, during which the rupee stayed largely below the 88-mark, weighed down by persistent portfolio outflows and US tariff-related uncertainties.
The local unit has been under steady pressure since the US imposed additional punitive tariffs on Indian imports last month over the purchase of Russian oil.
To curb the impact of the levies, Indian Prime Minister Narendra Modi rolled out consumption tax cuts. Both US and India are also looking at resuming negotiations to address the trade barriers.
“The rupee...remains caught between domestic trade and capital pressures and global dollar moves shaped by US inflation and Fed policy,” said Abhishek Goenka, founder and CEO of IFA Global.
While the Indian central bank has been intervening through state-run banks to smooth volatility, it is not defending a specific level, leaving the currency outlook fragile, Goenka said.
Thursday’s US inflation data, seen as supportive of rate cuts, prompted traders to price a 90 percent chance of two more moves this year. The Fed last lowered rates in December 2024.
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