Rupee slips 22 paise to 90.54 after India-U.S. trade rally
Rupee slips 22 paise to 90.54 after India-U.S. trade rally
Rupee trades cautious after a sharp rally; investors await signed India-U.S. trade deal text and clarity on its structure.
The rupee slipped 22 paise to 90.54 per dollar in early trades on Wednesday, extending a day of cautious sentiment after India and the United States announced a trade deal on suspected dollar buying by corporates and importers. The local unit had opened at 90.35 and soon weakened further, marking a retreat from Tuesday’s exuberant close.
Markets had previously celebrated as the rupee posted its best performance in months, with a record single-session gain of 117 paise or 1.28% to settle at 90.32, aided by a potential framework in the India-U.S. accord. However, traders warned that no signed or official text had yet been published, and the deal’s final structure remains unclear.
Speaking to traders, analysts said sustained gains in the rupee will depend on clarity around the commitments within the deal and whether there will be political or policy headwinds. Amit Pabari of CR Forex Advisors notes that much hinges on the final structure and the specifics around counterparty and import commitments.
The Reserve Bank of India has been active, with dollar purchases in late trading helping to cap escalation, according to market watchers. The market is watching for any roadmap on the supposed agreement, including whether sensitive agricultural items or dairy would be exempt.
For now, foreign funds are watching the trajectory of both rupee and dollar flows, wary of any quick pivot until the formal framework text is published. The next sessions will likely set the tone for how the rupee handles global risk on energy supply, geopolitical moves, and U.S. policy signals.
