Rupee Holds Steady: Calm Start for INR Amid Dollar Fluctuations

The Indian rupee opened at 85.6450 per US dollar on May 21, barely changed from its previous close of 85.6350, signaling a period of stability for the currency despite global market movements and recent volatility.

 

Key Highlights:

 

Stable Opening: The rupee’s opening at 85.6450 reflects minimal overnight movement, maintaining its position after a period of mild volatility. This steadiness comes as the currency has traded within a tight range, with no significant shocks from either domestic or international markets.

 

Dollar Dynamics: The US dollar has softened following dovish signals from the Federal Reserve and easing global trade tensions, particularly after the US and China agreed to reduce tariffs. These factors have supported emerging market currencies like the rupee, keeping downward pressure on the dollar index.

 

Inflation and RBI Policy: India’s consumer inflation fell to a near six-year low in April, strengthening expectations that the Reserve Bank of India may continue its rate-cutting cycle to support growth. Lower inflation and robust domestic economic data have provided a cushion for the rupee against external headwinds.

 

Market Sentiment: Foreign institutional inflows, a healthy interest rate differential, and strong forex reserves are underpinning investor confidence in the rupee. However, experts warn that global uncertainties, including oil price swings and geopolitical developments, could add volatility in the near term.

 

Historical Context: The rupee remains well below its all-time low of 88.10 per dollar, touched in February 2025, and has shown resilience despite recent global financial turbulence.

 

With the rupee holding steady, markets are watching for cues from both the RBI’s next policy moves and global economic developments.

 

Source: Trading Economics, Reuters, Business Standard