The Indian rupee slipped by 19 paise to settle at 85.29 against the US dollar in early trade on Tuesday, reflecting a cautious investor outlook amid upcoming key economic data releases. This decline follows a 35 paise gain on Monday, which had marked a brief upward trend for the local currency.
Foreign institutional investors (FIIs) showed limited activity, with net equity purchases totaling ₹135.98 crore. Despite a modest decline in global crude oil prices, the rupee remained under pressure due to subdued sentiment in the domestic equity markets and concerns surrounding upcoming industrial production and GDP growth data.
Brent crude, the international oil benchmark, dropped by 0.26% to $64.56 per barrel in futures trade, typically a supportive factor for the rupee. However, its positive effect was outweighed by tepid foreign fund flows and cautious investor behavior. Forex analysts observed that the rupee opened at 85.15 before weakening further during the session.
On the global front, the dollar index—which tracks the greenback against six major currencies—eased slightly, trading 0.03% lower at 98.83. While this would generally help emerging market currencies like the rupee, the domestic market conditions proved more influential.
Indian equities mirrored the rupee’s struggles, with the BSE Sensex falling by 465.46 points (0.57%) to close at 81,710.99. The Nifty also declined by 149.90 points (0.60%), ending the day at 24,851.25. Market experts attributed this downturn to investor hesitation ahead of April’s industrial output data and first-quarter GDP figures, both of which are expected later this week.
Analysts maintain that the rupee’s near-term outlook will be shaped by the trajectory of global oil prices and domestic economic indicators. While external cues remain mixed, internal macroeconomic data releases could either deepen or relieve pressure on the local currency and equity benchmarks.
