Mumbai: The Indian rupee saw a modest recovery on Friday from its record low a day earlier on inflows from a domestic IPO and dollar sales by the Reserve Bank of India (RBI) to prevent steep rupee depreciation. The rupee closed at 88.275 to a dollar, up 16.6 paise compared to Thursday’s record low closing of 88.44.
Abishek Goenka, founder and chief executive officer at IFA Global said, “The rupee appreciated marginally today boosted by rising expectations that the US Federal Reserve will begin cutting interest rates. The key US inflation data and signs of a weakening labor market reinforced this view, pushing markets to price in likely rate reductions in September, with two more rate cuts of 25 bps expected later this year.”
At the interbank foreign exchange, the domestic unit opened at 88.39 and fell to an intraday low of 88.42 against the US dollar during the session. The domestic unit settled for the day at 88.27 recovering 17 paise over its previous close. The exporters have asked for an incentive on rupee by about 15 per cent to compensate for the losses on account of the US tariffs. India is actively negotiating on the tariffs issue with the Chief Negotiator to go to US shortly while Trump and Modi actively engage with each other over X and Truth Social praising each other.
Commerce Minister Piyush Goyal has stated that a preliminary deal will be reached around November 2025. Meanwhile, despite the rupee’s gains, the pressure persists from import demand and likely FPI outflows underscoring that the recovery is fragile and dependent on external cues especially from the tariff front. The range for Monday is expected between 88.00 to 88.50.
