Currency Market News: Rupee slips 13 paise to 85.55 vs US dollar

Rupee depreciated by 13 paise to settle at 85.55 against the US dollar in early trade on Tuesday (May 20, 2025), amid weak domestic equities and persistent foreign fund outflows. The local currency opened at 85.47 at the interbank foreign exchange and slipped to 85.55, marking a 13 paise decline from the previous close.

On Monday, the rupee had appreciated 15 paise to end at 85.42 against the greenback. Forex analysts attributed the rupee’s weakness to broader risk-off sentiment in global markets and the absence of any fresh domestic cues.

The recent surge in the US 10-year Treasury yield has heightened concerns over Washington’s fiscal and monetary trajectory, pushing borrowing costs higher and denting investor sentiment globally. This, in turn, led to a marginal dip in the dollar index, which was trading lower by 0.06 per cent at 100.36.

Also Read: Currency Market News: Rupee gains 1 paisa to 85.53 vs dollar

Adding to the cautious mood, US Treasury Secretary Scott Bessent warned of possible “sharp tariff increases on key US trading partners”, a move that could unsettle global markets.

“Such trade disruptions could reintroduce recession fears and heighten global uncertainty, causing volatility across markets,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

Rupee range-bound for now, say analysts

“The Indian rupee opened a tad weaker and will remain in a range of 85.25/75 for the day as there is no fresh market indicator for it to change course,” Bhansali said, adding, “With US yields falling there could be some buying in USD to take the pair higher.”

He noted that the domestic currency is currently “in a consolidating mode.” On the commodities front, Brent crude prices remained largely flat, edging up 0.02 per cent to $65.55 per barrel in futures trade.

“Brent oil prices were muted at $65 per barrel as signs of faltering US-Iran deal eased some oversupply concerns but prospects of negotiations towards a Russia-Ukraine ceasefire weighed on the sentiment,” Bhansali added.

Also Read: First Trade: Nifty opens higher by 40 points; NLC India up over 7% 

Stock market summary

Meanwhile, the Indian equity market opened higher on Tuesday, tracking firm cues from Asian peers. The BSE Sensex rose by 56.75 points to open at 82,116.17, while the NSE Nifty50 was up by 50.75 points to 24,996.20. However, broader indices like midcap and smallcap traded on a cautious note and slipped slightly in early deals.

According to exchange data, foreign institutional investors (FIIs) sold equities worth Rs 525.95 crore on a net basis on Monday.

(With inputs from PTI)