The Indian rupee gained 14 paise to close at 95.21 (provisional) against the US dollar on Friday, supported by a retreat in the dollar index from its 15-month high and positive domestic equity markets. However, forex traders noted that robust dollar demand from importers and corporate hedgers, along with the Reserve Bank of India's active dollar purchases to rebuild foreign exchange reserves, limited the upside.
Rupee trading range and previous session
At the interbank foreign exchange market, the rupee opened at 95.20 against the greenback and oscillated between 95.16 and 95.35 during the session before closing at 95.21. This marked a recovery from Thursday's decline, when the rupee had settled lower by 19 paise at 95.35 against the US dollar.
Dollar index and global factors
The dollar index, which measures the greenback's strength against a basket of six major currencies, was trading at 100.75, down from its recent 15-month high of 101.6. Meanwhile, Brent crude oil futures traded 0.22% higher at $71.96 per barrel, though lower crude prices generally support the rupee by reducing India's import bill.
RBI's dollar purchases and reserves
According to experts, the Reserve Bank of India has been actively purchasing dollars to rebuild its foreign exchange reserves, which have fallen to approximately $672.6 billion from a February peak of $728.49 billion. This intervention absorbs dollar liquidity and puts downward pressure on the rupee.
Domestic equity market performance
On the domestic equity front, the Sensex climbed 261.79 points to settle at 77,763.91, while the Nifty rose 95.15 points to 24,270.85, providing some support to the rupee. However, foreign institutional investors sold equities worth Rs 311.82 crore on a net basis on Thursday, according to exchange data.
Foreign investor selling spree continues
Foreign investors extended their selling spree in June, withdrawing Rs 49,340 crore (USD 5.16 billion) from Indian equities. This was triggered by early-month global risk aversion, a preference for developed markets, soaring US bond yields, and stretched valuations in the domestic market. According to data from the Central Depository Services (India) Ltd, total withdrawals by Foreign Portfolio Investors (FPIs) from Indian equities have surged to Rs 2.7 lakh crore so far in 2026, surpassing the Rs 1.66 lakh crore pulled out during the entire calendar year 2025.
