The rupee closed at 95.71 against the U.S. dollar on Friday, gaining 3 paise from its previous close of 95.74, as the currency traded in a narrow range with limited impact from global cues. According to The Hindu, the rupee opened at ₹95.69 and touched an intraday high of ₹95.65 before settling at ₹95.71 (provisional) against the greenback. The currency lumbered in a thin range on Friday, with both positive and negative global factors showing limited impact on the currency as sustained interventions by the Reserve Bank of India continued to anchor it. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.25 per cent at 98.65, providing some support to the domestic currency. However, geopolitical tensions continue to simmer, with fresh warnings from US President Donald Trump to countries supporting Iran, negating some of the dollar's positive impact. As per The Hindu, the bias held firm even as the dollar was broadly weaker, sparking gains for most Asian currencies.
On the domestic market front, Sensex edged up 3.11 points to settle at 77,540.83, while the Nifty settled 20.15 points higher at 24,252, providing some support to the rupee. According to The Hindu, foreign institutional investors offloaded equities worth ₹583.36 crore on a net basis on Thursday, indicating mixed sentiment in domestic markets. The previous session on Thursday saw the rupee settle down 1 paisa at ₹95.74 against the U.S. dollar. Market participants noted that while a weaker U.S. dollar eases some depreciation pressure on the domestic currency, elevated crude oil prices would continue to keep pressure on India's import bill. As per The Hindu, forex traders said the Indian rupee traded flat to positive on a weak dollar and a positive tone in the domestic markets, however, the rupee pared initial gains as geopolitical tensions continue to simmer.
Brent crude, the global oil benchmark, was trading lower by 0.42 per cent at $93.39 per barrel in futures trade, as the geopolitical situation in the Middle East remains tense with fresh warnings from US President Donald Trump to countries supporting Iran. According to The Hindu, elevated crude oil prices may also pressurise the rupee, creating mixed signals for the currency's performance. Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, expects the rupee to trade with a slight negative bias as geopolitical tensions between the US and Iran continue amid talks of crushing economic sanctions against Iran by the US administration. As per The Hindu, traders may take cues from services PMI data from the US, while Choudhary noted that USD-INR spot price is expected to trade in a range of 95.50 to 96. The analyst also highlighted that a falling US dollar amid diminishing rate hike expectations may support the rupee at lower levels.
On the domestic macroeconomic front, the government on Thursday amended certain provisions of the Foreign Trade Policy to make it easier for exporters to invoice overseas sales and receive payments in Indian rupees. According to The Hindu, the amendments cover exports to all countries, although the rules vary by destination, with export contracts and invoices now able to be denominated in any foreign currency or Indian rupees for countries outside the Asian Clearing Union (ACU). Earlier, export earnings generally had to be received in a freely convertible currency. The RBI announced on Friday that the concessional FCNR(B) forex swap facility will now be available only for FCNR(B) deposits mobilised till August 31, 2026, with banks able to avail of swaps under this facility till September 11, 2026. The scheme for external commercial borrowings (ECBs) and overseas foreign currency borrowings (OFCBs) will continue to remain open till December 31, 2026.
