RUPEE FALLS 5 PAISE TO 87.63 AGAINST U.S. DOLLAR IN EARLY TRADE
Market Overview and Exchange Rate Movement
On August 9, 2025, the Indian rupee depreciated slightly by 5 paise to 87.63 against the US dollar in early trade. The currency opened at 87.56 and touched an intra-day low of 87.63 amid persistent pressures from global trade uncertainties and a robust US dollar backdrop.
Factors Behind the Rupee's Decline
Trade Uncertainty: Continued trade tensions, including tariffs and regulatory changes, have contributed to cautious investor sentiment.
Strong US Dollar: A firm US dollar supported by positive economic indicators in the United States exerted downward pressure on the rupee.
Foreign Fund Outflows: Sustained selling by foreign institutional investors in Indian equities led to capital outflows, impacting currency demand.
Reserve Bank of India’s Role: The RBI has been actively intervening in the forex market to protect the rupee and maintain stability around the 87.95 level, keeping volatility contained.
Market Sentiment and Outlook
Forex traders note that the Indian rupee is trading within a narrow range, with interventions from the central bank mitigating larger swings. While short-term depreciation pressures remain, the rupee's movement is expected to stay within controlled bounds, balancing between external risks and domestic economic fundamentals.
Implications for Businesses and Consumers
The marginal weakening of the rupee may slightly increase the cost of imports and dollar-denominated transactions, affecting sectors reliant on foreign goods or services. Exporters may gain a brief competitive edge with a weaker domestic currency. Consumers and businesses are advised to monitor currency trends amid ongoing global uncertainties.
FREQUENTLY ASKED QUESTIONS (FAQ)
Q1: What was the rupee’s exchange rate against the US dollar on August 9, 2025?
It fell 5 paise to 87.63 in early trade.
Q2: What caused the rupee to weaken against the dollar?
Trade uncertainties, a strong US dollar, and ongoing foreign fund outflows contributed to the depreciation.
Q3: How has the Reserve Bank of India responded?
The RBI has intervened in forex markets to stabilize the rupee and curb excessive volatility.
Q4: What impact does rupee depreciation have on the economy?
It can increase import costs, affect inflation, and influence the earnings of businesses with foreign currency exposure.
Q5: Is the rupee expected to decline further?
While near-term pressures persist, RBI support and market factors may keep the rupee range-bound in the short term.
Published on: August 9, 2025
Published by: PAVAN
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