Mumbai, Mar 25: The rupee weakened by 23 paise to 85.84 against the dollar in early trade on Tuesday, largely due to month-end demand for the US currency from importers.
Forex dealers said positive domestic equities and foreign fund inflows supported the rupee at lower levels.
However, key challenges remain for the local unit, including liquidity constraints and concerns over reciprocal tariff implementations.
At the interbank foreign exchange, the rupee opened at 85.59 against the greenback, then lost ground and touched 85.84, down 23 paise from its previous close.
On Monday, the rupee appreciated 37 paise to close at 85.61 against the US dollar, wiping off all its losses in 2025. The domestic unit has added 154 paise in the last seven trading sessions.
Meanwhile, the US dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05 per cent higher at 104.31.
Brent crude, the global oil benchmark, was trading 0.01 per cent higher at USD 73.01 per barrel in futures trade.
The rise in stock markets with Foreign Portfolio Investors (FPIs) back into buying mode has also caused the rise in the rupee, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
“As we approach the month-end, there could be a sharp fall in the rupee due to month-end positioning, unless the Reserve Bank of India has some other plans,” Bhansali said.
“Exporters are waiting for better levels to hedge. However, if 85.50 breaks decisively then maybe we are approaching 84.75”, he added.
In the domestic equity market, the 30-share BSE Sensex was trading 683.76 points, or 0.88 per cent, higher at 78,668.14 points, while the Nifty was up 185.90 points, or 0.79 per cent, at 23,844.25 points.
Foreign institutional investors (FIIs) purchased equities worth Rs 3,055.76 crore on a net basis on Monday, according to exchange data.
