The Indian rupee fell by 10 paise to 96.45 against the US dollar in early trading on Wednesday ahead of the Reserve Bank of India's monetary policy decision. In the interbank market, the rupee opened at 96.37, then lost ground and dropped to 96.45, which is 10 paise lower than the previous close. On Tuesday, the rupee closed at 96.35. The pressure on it is linked to a continued outflow of foreign funds from Indian equities and a strong dollar, which remains at multi-month highs above 102. The dollar index traded at 102.02, gaining 0.19%.
Investors are awaiting the RBI's rate decision. Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, noted: "Today is the RBI meeting, where a 25 basis point rate hike is expected with a slight chance of a 50 basis point increase. The RBI may also raise the CRR by 1% to 4% to absorb excess liquidity." According to him, the market is looking for the RBI's stance on the falling rupee, which has lost over 2% in the last month due to demand for dollars from the oil sector and foreign portfolio investors. The RBI will announce its decision at 10:00 AM. The last rate hike was in February 2023, by 0.25% to 6.50%. In 2023-24, the rate was not changed, and the rate-cutting cycle began in 2025. The current repo rate is 5.25%.
In the commodity market, Brent traded up 0.91% at $101.50 per barrel. In the Indian stock market, the Sensex fell by 460 points to 72,599.05, while Nifty declined by 164.80 points to 22,610.85. Foreign institutional investors sold shares worth ₹2,961.30 crore on a net basis on Tuesday, according to exchange data.
This material is prepared solely for informational purposes and does not constitute financial advice or a recommendation.
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