Indian Rupee trades up on strong cues; opens 21 paise higher at 85.13/$

The Indian Rupee strengthened on Wednesday, supported by domestic cues along with a fall in crude oil prices and the dollar index. 

 

The domestic currency opened 21 paise higher at 85.13 after ending at 85.34 against the greenback on Tuesday, according to Bloomberg data. The currency has remained volatile this month and has fallen by 0.79 per cent so far. 

 

India’s retail inflation dropped to its lowest level since July 2019, with the year-on-year Consumer Price Index (CPI) for April 2025 recorded at 3.16 per cent, paving the way for the central bank to focus on growth. Robust harvest despite intense heatwaves drove down food costs, which account for nearly half of the consumer price basket.

 

 

The latest inflation figures could give the Reserve Bank of India another chance to cut rates next month in its scheduled meeting, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.  

 

The currency pared early gains yesterday on buying from global funds, oil companies, government repayment of interest, defence payments and importers hedging, Bhansali said. "Exporters can continue selling on all good upticks while importers can buy the dips as the rupee remains in a range and till the broad range of 84.25 to 86 is broken on either side."

 

Volatility has driven volumes higher, while premiums have declined due to a reduced interest rate differential between the two countries, as US yields have risen and Indian yields have fallen, he said. 

 

Meanwhile, the dollar index pared gains after a de-escalation of tariffs was announced earlier in the week, with the US slashing duties on Chinese products to 30 per cent from 145 per cent and Beijing dropping its levy on most goods to 10 per cent.  The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was down 0.07 per cent at 100.93.

 

In commodities, crude oil prices were hovering near a two-week high amid the easing global trade tensions after the US and China agreed on a 90-day truce. Brent crude price was down 0.66 per cent to $66.19 per barrel, while WTI crude prices were lower by 0.68 per cent at 63.24, as of 9:10 AM.