
On March 6, 2025, the Indian Rupee fell by 6 paise to settle at 87.12 against the US Dollar. This decline came after a three-day rally where the Rupee had gained 18 paise over the preceding two sessions. The Rupee’s performance was influenced by several factors, including uncertainty over trade tariffs and persistent foreign fund outflows.
In the initial trade, the Rupee gained momentum after the US delayed the implementation of higher tariffs on imports from Canada and Mexico. Additionally, the Reserve Bank of India’s decision to infuse ₹1.9 trillion liquidity into the banking system provided some support. However, the Rupee later turned volatile and hit a low of 87.16 before ending the session at 87.12.
Forex traders noted that investors were cautious, awaiting the weekly unemployment claims data from the US and the monetary policy announcement by the European Central Bank. While a positive equity market, weakness of the American currency in the overseas market, and easing crude oil prices contained the losses for the Rupee, selling pressure by Foreign Institutional Investors (FIIs) contributed to the decline.
Anuj Choudhary, a Research Analyst at Mirae Asset Sharekhan, mentioned that the Rupee lost its initial gains due to selling pressure by FIIs, while the American currency fell to a four-month low as the US decided to delay implementing higher tariffs on imports from Canada and Mexico. Choudhary further stated that the Rupee is expected to trade with a slight positive bias on positive domestic markets and weakness in the US Dollar. However, FII outflows may cap sharp gains in the local unit.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.15% at 104.12. Meanwhile, Brent crude, the global oil benchmark, rose 0.39% but stayed at six-month low levels of USD 69.57 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex surged 609.86 points, or 0.83%, to settle at 74,340.09, while the Nifty advanced 207.40 points, or 0.93%, to close at 22,544.70 points. Both indices had closed the previous session with a gain of more than 1%. FIIs offloaded equities worth ₹2,895.04 crore on a net basis on Wednesday.