Rupee Declines as Global Dollar Demand Strengthens

The Indian rupee edged lower today, slipping to around ₹85.87 per dollar amid growing strength in the U.S. currency and modest outflows from Indian debt and equity markets. Currency traders noted that increased global demand for dollars, especially after heightened U.S. trade tariffs, created pressure across emerging market currencies, with the rupee seeing one of the sharper intraday moves among Asian peers.

The Reserve Bank of India maintained a passive stance, letting market forces absorb the external shock. Forward premiums, a leading indicator of rupee sentiment, inched higher—suggesting that market participants expect further currency stress ahead. These movements reflect concerns that India's current account position may weaken if global risk-off sentiments persist, particularly with oil prices remaining volatile.

With India’s inflation data expected soon and the RBI’s policy tone still focused on liquidity tightening, the rupee may remain range-bound with a bearish tilt. Unless global bond yields stabilize or FII inflows improve, the domestic currency could face further downside pressure despite India's relatively strong macroeconomic fundamentals.