Is the Indian Rupee Stronger Against the US Dollar Today?
Click to start listening
Synopsis
On May 13, the Indian rupee gained 75 paise, opening at 84.65 against the US dollar. Analysts forecast a trading range of 84.50 to 85.25. The recent trade agreement between the US and China could further impact the rupee's performance, highlighting its resilience despite global challenges.
Key Takeaways
- The Indian rupee opened at 84.65, gaining 75 paise.
- Projected trading range is between 84.50 and 85.25.
- A trade agreement between the US and China is influencing currency strength.
- The rupee remains stable compared to global currencies.
- Annualized volatility is at 2.7 percent.
Mumbai, May 13 (NationPress) The Indian rupee commenced trading with a gain of 75 paise, positioned at 84.65 against the US dollar on Tuesday, following its prior close of 85.38 a dollar.
The anticipated trading range for the day is projected to be between 84.50 and 85.25, as suggested by analysts. The dollar has retained its strength due to a pivotal trade agreement between the US and China.
Under this agreement, the US will cut tariffs on Chinese goods from 145 percent to 30 percent for a duration of 90 days, while China will reciprocate by reducing tariffs on US products from 125 percent to 10 percent for the same period. Both nations will also set up a framework for ongoing discussions regarding economic and trade relations.
Analysts believe that any new developments in geopolitical matters could substantially influence the rupee's trajectory.
In FY25, the rupee fluctuated between 83.10 and 87.6 against the greenback, initially depreciating after the US elections and falling by 2.4 percent throughout the year due to consistent FPI outflows and a robust US dollar.
Nonetheless, the rupee demonstrated relative stability against other global currencies, bolstered by solid government finances, a declining current account deficit, enhanced liquidity, and moderating oil prices, as highlighted in the NSE’s Market Pulse Report for April.
As the year progressed, a reversal in dollar strength, coupled with renewed FPI inflows into debt, facilitated the rupee's recovery, appreciating by 2.4 percent in March 2025.
The average annualized volatility of the rupee decreased to 2.7 percent in FY25, ranking it among the least volatile major emerging market currencies, underscoring India’s robust external buffers and proactive forex management.
“However, the rupee appears to be overvalued, with the 40-currency trade weighted REER climbing to 105.3, even though both REER and NEER gradually moderated since H1FY25, suggesting a relief from overvaluation. The one-year forward premium for the rupee has continued to decline, reflecting shifting premium dynamics and India’s macroeconomic resilience,” the report stated.
Point of View
The nation remains optimistic about the Indian rupee's resilience in the face of global economic fluctuations. The recent trade agreements and proactive governmental measures signal a robust financial strategy that can support the rupee against international pressures.
NationPress
08/06/2025
Frequently Asked Questions
What caused the Indian rupee to strengthen?
The Indian rupee strengthened due to a significant trade agreement between the US and China, which is expected to stabilize market conditions.
What is the trading forecast for the rupee?
Analysts predict the trading range for the rupee will be between 84.50 and 85.25.
How did the rupee perform in FY25?
In FY25, the rupee traded between 83.10 and 87.6, experiencing a 2.4 percent depreciation due to FPI outflows.
What is the average volatility of the rupee?
The average annualized volatility of the rupee decreased to 2.7 percent in FY25.
How is the rupee's valuation assessed?
The rupee is considered overvalued with the 40-currency trade weighted REER at 105.3, although it has moderated recently.
