The Indian rupee continued its downward slide on Friday, extending losses for the third straight session. It slipped 10 paise to settle at 90.44 against the US dollar. Persistent foreign fund outflows and a stronger greenback kept the domestic currency under pressure throughout the day.
Rupee's Trading Pattern
In early interbank trade, the rupee opened at 90.37. It then drifted lower to reach 90.44 by the close. This marked a decline from its previous close of 90.34 on Wednesday. The currency had ended Wednesday down 11 paise, following a 6-paise drop on Tuesday. Forex markets remained closed on Thursday due to the Mumbai municipal corporation elections.
Factors Cushioning the Fall
Traders observed that the rupee's decline was somewhat limited by two key factors. First, declining crude oil prices helped reduce pressure on the currency. Second, a positive mood in domestic equity markets provided additional support. These elements worked together to prevent sharper losses for the rupee.
Global Dollar Movement
Globally, the dollar index showed a marginal decrease. It slipped 0.02% to 99.10. This index measures the US currency's performance against six major world currencies. Analysts pointed to recent US inflation data for December as influencing the dollar's movement. The data has reduced expectations of an immediate interest rate cut by the Federal Reserve.
India's Trade Deficit Widens
Official data released on Thursday revealed a slight widening of India's trade deficit. In December 2025, the deficit reached $25.04 billion. This compares to $24.53 billion in November and $22 billion in December 2024. The expanding trade deficit added further pressure on the rupee.
Commodities and Equity Markets
In the commodities market, Brent crude futures traded 0.34% lower at $63.54 per barrel. On the domestic front, benchmark equity indices opened higher. The Sensex advanced 210.04 points to reach 83,592.75. Similarly, the Nifty gained 34.65 points, closing at 25,700.25.
Foreign Institutional Investors Activity
Despite the positive equity trend, foreign institutional investors continued to sell Indian shares. Exchange data showed they offloaded shares worth Rs 4,781.24 crore on Wednesday. This selling activity contributed to the rupee's weakness against the dollar.
