The Indian Rupee (INR) weakened on Thursday, as renewed demand for the U.S. Dollar (USD) put downward pressure on the local currency. The INR also faced additional headwinds from position maturities in the non-deliverable forwards (NDF) market and continued equity sales by foreign investors, which could exacerbate the rupee’s losses.
Despite these pressures, the Reserve Bank of India (RBI) has been actively intervening in the currency markets, which may help to limit further declines in the INR. A drop in crude oil prices, sparked by U.S. President Donald Trump’s outreach to Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky to discuss potential peace talks, could offer some relief for the rupee. As the world’s third-largest consumer of crude oil, India could benefit from lower energy costs.
India’s Prime Minister Narendra Modi is also set to meet with several high-ranking U.S. officials during his upcoming trip to Washington, D.C., including a discussion with Elon Musk, the head of the Department of Government Efficiency, which is linked to the Trump administration. The meeting is expected to cover Musk’s ventures in India, including the expansion of Starlink and Tesla operations.
On the U.S. economic calendar, the weekly Initial Jobless Claims and the Producer Price Index (PPI) data are due later on Thursday, which could further influence market sentiment and impact the USD/INR exchange rate.
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