Rupee weakens against US dollar as foreign investors continue selling

Forex traders noted a negative bias for the dollar/rupee pair, with foreign investors continuing to sell Indian stocks while the Reserve Bank of India’s (RBI) support gradually wanes.

At the interbank foreign exchange market, the rupee opened at 86.94 and further depreciated to 86.96, marking an 8-paise drop from its previous close.

On Monday (February 17), the currency had declined by 17 paise, settling at 86.88.Traders observed that the RBI’s measures, along with the absence of expected US tariffs, have eased trade-related concerns. However, challenges persist on the domestic macroeconomic front. India’s exports fell for the third consecutive month in January, down 2.38% year-on-year to $36.43 billion, while the trade deficit widened to $22.99 billion. Imports, on the other hand, rose by 10.28% to $59.42 billion, largely due to an increase in gold shipments, according to the Commerce Ministry.

Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, stood at 106.90, up by 0.31%.Brent crude, the global oil benchmark, was trading 0.24% higher at $75.40 per barrel in futures.

Looking ahead, CR Forex Advisors’ MD Amit Pabari suggested the dollar/rupee pair might trade between 86.60 and 87.20, with 87.20 acting as a strong resistance level and 86.50 providing critical support.

A break below 86.50 could see the rupee strengthen further, targeting 85.80 to 86.00.

–With PTI inputs

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