Rupee Holds Steady at 95.89 Against Dollar

The Indian rupee ended trading unchanged at 95.89 against the U.S. dollar on Friday. The currency opened at 95.75 and touched an intraday high of 95.75 before settling at the previous close. This stability followed a period of decline where the rupee lost 150 paise over eight sessions since September 4.

Market participants attributed the flat close to a mix of domestic and global factors. Positive momentum in Indian stock markets provided support for the local unit. However, a firm U.S. dollar and rising interest rates prevented any significant appreciation.

Dollar Strength Offsets Local Gains

The U.S. Federal Reserve raised interest rates by 25 basis points, which supported the greenback. U.S. bond yields eased slightly, but the dollar remained a strong currency. The dollar index, which tracks the dollar against six major peers, fell 0.02% to 99.97. This slight dip did not weaken the dollar enough to allow the rupee to gain ground.

Domestic equity markets showed mixed results. The Sensex index fell 19.63 points to close at 74,294.96. The Nifty index rose 75.80 points to settle at 23,346.40. Foreign institutional investors sold a net 3,208.76 crore worth of Indian equities on Thursday. This outflow of capital adds pressure to the currency despite stock market resilience.

Crude Oil Prices Ease Pressure

Brent crude oil futures dropped 0.93% to $103.85 per barrel. This decline below the 104 level reduced import costs for India. Analysts noted that lower oil prices capped the rupee’s decline. The reduction in energy import bills helps improve the trade balance, providing a floor for the currency.

Market Outlook Remains Cautious

Traders are watching U.S. industrial production data for further cues. The USD-INR spot price is expected to trade between 95.65 and 96.15 in the near term. The rupee had previously strengthened from 94.43 to 95.89 over the last two weeks. The current range reflects a balance between domestic support and global dollar strength.