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The rupee depreciated by 36 paise to close at 87.31 against the U.S. dollar on Monday due to a strong dollar demand in the market owing to capital outflows. On Friday, the rupee appreciated 17 paise to close at 86.95 against the U.S. dollar.
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During intra-day trade, the rupee had sunk 38 paise against the dollar, making its steepest single-day drop in a month as foreign portfolio investors (FPIs) are seen selling in the stock market and taking dollars away.
“The rupee weakened due to risk-averse sentiment and capital outflows. Concerns over a potential U.S. recession and Trump’s tariff policies put pressure on Asian currencies,” said Dilip Parmar, research analyst, HDFC Securities.
“In the short term, USD INR has a support level at 86.87 and a resistance level at 87.55. This week, traders will closely monitor CPI and trade data for key signals that could determine the future direction of the rupee,” he added.
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Forex dealers said the RBI was seen intervening during the day to curb the volatility and minimise the fall.
The stock market witnessed volatility on Monday and the NSE Nifty-50 index closed with a loss of 0.41% at 22,460. The BSE Sensex also fell 0.29% to 74,115 led by selling in banking, auto and heavyweight stocks.
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Published – March 10, 2025 09:33 pm IST
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Rupee weakens due to risk-averse sentiment, capital outflows
