Indian rupee weakens on import dollar demand

The Indian rupee weakened in early trading on Wednesday due to dollar bids from importers in a lacklustre start to 2025, while dollar-rupee far forward premiums eased from a high.

The rupee was at 85.6725 against the U.S. dollar at 09:50 a.m. IST, lower than its previous close of 85.6150. The rupee has been under pressure due to factors like the strong US dollar and worries about India’s economic growth slowing down.

The rupee continued its decline for the seventh year in a row in 2024, with bankers and analysts anticipating that the depreciation pressure will persist into early 2025.

The dollar index increased by almost 0.4 per cent on Tuesday to 108.4, nearing a two-year high. US bond yields also rose in light trading during the holiday period, with the 10-year Treasury yield edging up by 3 basis points to 4.57 per cent.

Attribution: Reuters

Subediting: Y.Yasser