On May 19, 2025, the Indian rupee appreciated by 17 paise to close at 85.40 against the US dollar, buoyed by a weaker dollar index and declining crude oil prices. The rupee opened at 85.43 and traded between 85.35 and 85.61 during the day. Forex traders attributed the rupee's strength to global factors, including Moody's downgrade of the US credit rating and a drop in crude oil prices.

Moody's Investors Service downgraded the US credit rating from AAA to AA1, citing concerns over the country's rising debt levels. This downgrade led to a decline in the dollar index, which measures the greenback's strength against a basket of six currencies. The dollar index fell by 0.86% to 100.22, making the US dollar less attractive to investors and supporting the rupee's appreciation.

In addition to the weaker dollar, declining crude oil prices also contributed to the rupee's gains. Brent crude, the global oil benchmark, fell by 0.78% to $4.90 per barrel in futures trade. Lower oil prices reduce India's import bill, positively impacting the trade balance and supporting the domestic currency.

India's forex reserves rose by $4.553 billion to $690.617 billion for the week ended May 9, 2025, reaching a seven-month high. The increase was primarily driven by a significant rise in gold assets, which jumped by $4.518 billion to $86.337 billion. Foreign currency assets also saw a slight increase of $196 million to $581.373 billion. The rise in forex reserves provides a cushion for the rupee against external shocks and enhances investor confidence.

Despite the rupee's appreciation, domestic equity markets closed lower on May 19, 2025. The BSE Sensex declined by 271.17 points, or 0.33%, to close at 82,059.42, while the NSE Nifty fell by 75.35 points, or 0.30%, to settle at 24,944.45. The decline was primarily due to losses in information technology stocks, which were negatively impacted by Moody's downgrade of the US credit rating. The downgrade raised concerns about global economic stability, affecting investor sentiment.

Looking ahead, forex analysts expect the rupee to trade with a positive bias amid persistent weakness in the US dollar index and a weak tone in global crude oil prices. However, weak domestic equities may cap a sharp upside. The USD-INR spot price is expected to trade in a range of 85.10 to 85.65.

In summary, the Indian rupee's appreciation on May 19, 2025, was driven by a combination of global factors, including a weaker US dollar due to Moody's credit rating downgrade and declining crude oil prices. The increase in India's forex reserves further supported the rupee's strength. However, domestic equity market performance and global economic developments will continue to influence the rupee's trajectory in the near term.

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The Closed IPOs are Accretion Pharmaceuticals, Integrity Infrabuild Developers.

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