October 9 , 2025 : The Indian rupee opened slightly weaker on Thursday, falling by 3 paise to 88.78 against the U.S. dollar in early trade, amid a firm American currency and cautious trading in global markets.
At the interbank foreign exchange market, the rupee opened at 88.75, slipped marginally, and was quoted at 88.78 against the dollar, compared to its previous close of 88.75. Traders said the movement was largely range-bound, as investors awaited fresh domestic and international economic cues.
Global Currency Strength Impacts Rupee
The modest fall in the rupee came as the U.S. dollar index — which measures the greenback’s strength against a basket of six major currencies — rose slightly to 106.3. This followed stronger-than-expected U.S. economic data, which reinforced expectations that interest rates may remain higher for longer.
The stronger dollar made most Asian currencies, including the Indian rupee, trade on the back foot. Market analysts said the global risk appetite remained subdued as investors tracked oil prices, bond yields, and developments in the Middle East.
Crude Oil Prices Add Pressure
Crude oil prices also inched higher, with Brent crude trading around $86 per barrel, putting additional pressure on the Indian currency. Since India imports nearly 85% of its oil requirements, higher global crude prices tend to increase demand for U.S. dollars in the local market, impacting the rupee’s value.
“Oil prices firming up and a strong dollar index have kept the rupee slightly under pressure. However, the movement is within a tight range,” said Anindya Banerjee, Senior Currency Analyst at Kotak Securities.
Foreign Fund Activity and Market Influence
On the positive side, foreign institutional investors (FIIs) were net buyers in the domestic equity market this week, which provided some cushion to the rupee. However, dollar demand from oil importers and corporates offset the impact of these inflows.
Equity markets opened higher in early trade, with both the Sensex and Nifty rising on the back of strong foreign fund inflows and gains in energy and IT stocks. Typically, robust stock market performance supports the rupee, but today’s global currency strength weighed more heavily.
RBI’s Role and Policy Outlook
Traders also pointed out that the Reserve Bank of India (RBI) has been closely monitoring currency market movements. The central bank is expected to intervene if volatility rises sharply, ensuring stability in the foreign exchange market.
Experts believe that with India’s strong forex reserves — currently above $640 billion — the rupee is well-supported and unlikely to see large, sudden declines.
“Rupee’s depreciation today is mild and part of a normal trading pattern. RBI’s active management ensures that the currency remains among the most stable in the emerging market basket,” said Sugandha Sachdeva, Chief Strategist at Acme Investment Advisors.
Domestic Factors and Market Expectations
Domestically, investors are watching key economic data, including inflation numbers and industrial output, which are expected later this week. Any positive indicators could strengthen the rupee in the coming days.
India’s current account balance, export growth, and foreign investment flows will also play a role in shaping the rupee’s direction through October.
Global Market Context
Other Asian currencies also saw mixed movements. The Japanese yen traded weaker at 149.6 per dollar, while the Chinese yuan remained steady. Analysts say the rupee’s movement is largely in line with regional peers amid moderate risk sentiment.
In global markets, investors continue to assess the impact of U.S. economic strength on future Federal Reserve policy decisions. If U.S. inflation remains contained and rate hikes pause, emerging market currencies like the rupee could see renewed strength.
Outlook for Coming Days
Currency traders expect the rupee to trade in a narrow range of 88.60 to 88.90 per dollar in the near term. A decisive move above or below this range would depend on external factors such as oil prices, U.S. bond yields, and geopolitical developments.
Experts suggest that long-term fundamentals for the Indian economy remain strong, and the rupee’s stability reflects the country’s resilience amid global uncertainty.
“The rupee is likely to stay stable in the 88.50–89 range in the short term. With consistent foreign inflows, India’s currency remains one of the better-performing Asian units,” said Madhavi Arora, Lead Economist at Emkay Global.
Summary
The Indian rupee slipped 3 paise to 88.78 against the U.S. dollar amid a strong American currency and higher crude oil prices, though foreign inflows helped limit deeper losses.