October 14, 2025: The Indian rupee fell by 9 paise to 88.77 against the U.S. dollar in early trade on Tuesday, tracking a stronger greenback in global markets and persistent foreign fund outflows. The domestic currency opened weaker at 88.70 and touched an intraday low of 88.77 at the interbank foreign exchange market, down from its previous close of 88.68 on Monday.
Traders attributed the rupee’s decline to renewed demand for the U.S. dollar by importers and firm U.S. Treasury yields, which have strengthened the dollar index globally. The dollar index, which measures the greenback’s performance against a basket of major currencies, was trading around 106.4, up 0.12%, reflecting investor confidence in the U.S. economy and expectations that the Federal Reserve may keep interest rates higher for longer.
According to forex dealers, foreign fund withdrawals from domestic equity markets have also weighed on the rupee. Data from exchanges showed that foreign institutional investors (FIIs) remained net sellers of Indian equities in recent sessions, dampening overall sentiment.
Meanwhile, crude oil prices remained volatile, with Brent crude hovering near $87 per barrel, adding pressure on India’s import bill and currency performance. Rising oil prices typically increase the country’s import costs, widening the trade deficit and putting pressure on the rupee.
However, analysts noted that the rupee’s decline was limited by strong domestic fundamentals and sustained inflows into India’s bond market. “Despite short-term fluctuations, the rupee remains relatively stable. India’s forex reserves are robust, and the RBI’s active management has prevented excessive volatility,” said Arvind Nair, a senior currency strategist.
The Reserve Bank of India (RBI) is believed to have intervened in the spot market to smooth out sharp movements and ensure liquidity. Market participants say the central bank has been maintaining a delicate balance between supporting the rupee and ensuring adequate foreign exchange reserves, which currently stand at around $647 billion.
On the macroeconomic front, investors are awaiting key U.S. inflation data and domestic industrial output figures, both of which could influence short-term currency trends. Higher U.S. inflation could strengthen the dollar further, while a robust domestic growth reading might support the rupee.
Analysts believe the currency will likely trade in a narrow range in the near term. “We expect the rupee to remain between 88.60 and 88.90 per dollar for now, as global cues continue to dominate sentiment,” said Vikram Deshmukh, Chief Forex Analyst at a Mumbai-based brokerage.
Equity markets opened mixed, with the BSE Sensex trading 130 points higher at 84,250, and the NSE Nifty50 rising 40 points to hover around 25,310. The positive equity momentum helped offset some downward pressure on the rupee, though global factors remain the key drivers.
In the broader context, the rupee’s performance has been relatively steady compared to other emerging market currencies, many of which have seen sharper declines amid global risk aversion. Economists suggest that the Indian currency could recover modestly if oil prices stabilize and foreign inflows pick up in the coming weeks.
Overall, the rupee’s fall on Tuesday reflects the interplay of global dollar strength, volatile crude prices, and cautious investor sentiment. Market experts maintain that unless there is a significant change in global risk appetite or monetary policy signals, the rupee is likely to remain under mild pressure in the short term.
Summary
The Indian rupee slipped 9 paise to 88.77 against the U.S. dollar amid a stronger greenback, foreign fund outflows, and firm crude prices, despite RBI support maintaining market stability.