Rupee rises 3 paise to close at 85.69 against U.S. dollar

Rupee gains 3 paise against dollar, supported by foreign fund inflows; faces pressure from liquidity constraints and tariffs.

The rupee pared its initial losses and settled for the day higher by 3 paise at 85.69 (provisional) against the U.S. dollar on Wednesday (March 26, 2025), supported by a resurgence of foreign fund inflows.

Forex dealers said the rupee faces renewed pressure on liquidity constraints, concerns over reciprocal tariff implementations and month-end demand for the U.S. currency from importers.

At the interbank foreign exchange, the rupee opened at 85.71 then touched an intraday high of 85.68 and a low of 85.98 against the greenback. The unit ended the session at 85.69 (provisional) against the dollar, registering a gain of 3 paise from its previous closing level.

On Tuesday (March 25, 2025), the rupee snapped its seven-session rally and settled with a loss of 11 paise at 85.72 against the U.S. dollar.

"The Indian rupee gained strength following a short pause on Tuesday (March 25, 2025), driven by a resurgence of foreign fund inflows. In addition, foreign banks and exporters played a key role by increasing the supply of dollars into the market," Dilip Parmar – Senior Research Analyst, HDFC Securities, said.

However, trading volumes remained subdued as market participants made necessary adjustments ahead of the fiscal year-end, Parmar noted.

"Looking ahead, the USD-INR spot is likely to encounter support near the 85.40 level, while facing resistance around the 86.25 mark," he added.