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Rupee Weakens: Hawkish Fed, FII Outflows Hit INR

By SivamRupee Weakens: Hawkish Fed, FII Outflows Hit INR

Indian Rupee depreciates to 94.50 against the US Dollar due to hawkish Federal Reserve signals and significant FII outflows. Trade talks offer limited support.

Rupee Slides on Strong Dollar, Fund Outflows

The Indian rupee weakened significantly against the US dollar in early trade Friday, depreciating by 10 paise to trade at 94.50. This marks a notable drop from its previous close of 94.40 on Thursday.

Key Drivers Behind the Dip

Several factors contributed to the rupee’s decline, primarily a surging US dollar and substantial foreign capital exiting the Indian market.

  • The US dollar index climbed above the 101 level, reaching its highest point since May 2025.
  • This strength followed hawkish signals from the Federal Reserve, led by Chair Kevin Warsh.
  • Foreign institutional investors (FIIs) offloaded Indian equities worth Rs 1,025.20 crore on a net basis Thursday.

Trade Talks Offer Limited Support

Despite the downward pressure, ongoing trade negotiations between India and the United States provided some optimism. These discussions helped to temper some of the rupee’s losses, preventing a steeper fall.

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