Rupee falls 8 paise to 86.96 against U.S. dollar in early trade

Rupee weakens against dollar due to foreign fund outflows, negative equities trend; RBI support waning; trade deficit widens.

The rupee depreciated 8 paise to 86.96 against the U.S. dollar in early trade on Tuesday (February 18, 2025), weighed down by sustained foreign fund outflows and a negative trend in domestic equities.

Forex traders said there is a negative bias for the USD/INR pair as foreign investors continue to sell domestic equities and the RBI support is tapering off slowly.

At the interbank foreign exchange, the rupee opened at 86.94 then fell further to 86.96 against the American currency, registering a decline of 8 paise over its previous close.

On Monday, the rupee depreciated 17 paise to close at 86.88 against the U.S. dollar.

Traders said the central bank's measures, coupled with the absence of anticipated US tariffs, have alleviated trade-related concerns, but despite this challenges persists on the domestic macroeconomic front.

India's exports declined for the third month in a row in January, falling by 2.38%-year to $36.43 billion, while the trade deficit widened to $22.99 billion in the month.

Imports rose by 10.28% year-on-year to $59.42 billion in January due to an increase in gold shipments, according to the Commerce Ministry data.