The Indian rupee appreciated by 18 paise to 85.56 against the US dollar in early trading on Friday, supported by continued foreign fund inflows into domestic markets. Over the past four days, foreign investors have injected more than $2 billion into Indian equities, while bond investments this month have surpassed $3 billion, according to forex dealers.
Despite the positive momentum, concerns over the economic fallout from escalating global trade tensions limited further gains for the local currency.
At the interbank foreign exchange, the rupee opened at 85.64 against the dollar, subsequently strengthening to 85.56. On the previous trading day, the rupee had depreciated by 5 paise, closing at 85.74.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, noted that the USD/INR pair is likely to fluctuate within a range of 85.60 to 86 as the trading day marks the end of the week, month, quarter, and financial year. Bhansali also highlighted the anticipation around upcoming economic data releases on March 31, including the current account figures for the previous quarter.
Meanwhile, global market sentiment remained subdued following the resurgence of trade tensions. US President Donald Trump’s decision to impose a 25% tariff on auto imports reignited concerns over protectionist policies.
In the global currency market, the US dollar index, measuring the greenback’s strength against a basket of six major currencies, dipped by 0.03% to 104.30.
On the commodities front, Brent crude prices edged down 0.08%, trading at $73.97 per barrel in the futures market.
In the domestic equity markets, the BSE Sensex declined by 165.16 points, or 0.21%, to 77,441.27, while the NSE Nifty fell by 41.55 points, or 0.18%, to 23,550.40.
According to exchange data, foreign institutional investors (FIIs) continued their buying streak, with net purchases worth ₹11,111.25 crore on Thursday, March 27.