Indian rupee finished almost level on Friday, losing initial gains but still able to stay near a two-month high as the global markets gave mixed signals, crude prices increased and the U.S dollar index was strong. The home currency also closed slightly higher by 1 paisa than the earlier close at 87.84 per U.S dollar but saw an intraday high of 87.64.
The rupee has so far weakened by around 2.6 percent in 2025 of which it has been particularly weak owing to continuous outflows of foreign funds, high oil imports bills and periodic dollar strength. According to traders, most Asian currencies recorded minor gains on Friday, but Indian rupee was trading in a range given the fact that increasing crude prices and restrained posture of the RBI curtailed its appreciation.
The U.S. dollar index slipped 0.12 to 99.057 following the announcement of the fact that former U.S. President Donald Trump and Chinese President Xi Jinping are set to face each other next week during the margins of the Asia-Pacific Economic Cooperation (APEC) summit. The greenback was supported by the prospect of the major debates on trade and international economy policy.
In the meantime, the world oil price experienced some minor corrections due to the steep 5% increase on Thursday brought by the new sanctions the U.S. imposed on two Russian oil firms. Brent crude and West Texas Intermediate (WTI) declined 0.14% and 0.10% respectively to $65.90 per barrel and $61.74 per barrel, respectively, as of 3:25 PM IST.
Under the macroeconomics, the Real Effective Exchange Rate (REER) of India was constantly depreciating and it stood at 97.6 in September compared to 98.8 in August, and this indicates lower competitiveness as a result of inflation differentials against major trading countries.
The Reserve Bank of India, on its part, avoided dollar purchases during the second consecutive month, as it sold off 7.6 billion dollars.
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