The Indian rupee showed resilience on May 14, 2025, gaining 10 paise to settle at 85.26 against the US dollar. This gain was supported by multiple factors, including a weakening of the US dollar in global markets, easing of trade tariff tensions, and encouraging domestic macroeconomic data.

The rupee opened the day on a positive note and fluctuated between an intra-day high of 85.05 and a low of 85.52 before closing firmly above the previous day’s level. Forex traders noted that the decline in the greenback’s strength internationally and the growing appetite for riskier assets bolstered investor confidence in the local currency.

A key contributor to the rupee’s strength was the drop in the dollar index, which measures the greenback’s performance against a basket of six major currencies, falling by 0.64 percent to 100.35. Simultaneously, Brent crude oil prices eased by 1.10 percent to 65.90 dollars per barrel, reducing pressure on India’s import bill and providing additional support to the rupee.

Dilip Parmar, Senior Research Analyst at HDFC Securities, remarked that the combination of a weaker US dollar, falling crude prices, and positive risk sentiment underpinned the rupee’s gains. Looking ahead, Parmar predicted the USD-INR spot rate might find a support floor near 84.90 and face resistance around 85.70.

The positive sentiment was also reflected in the domestic equity markets. The benchmark BSE Sensex rose by 182.34 points (0.22 percent) to close at 81,330.56, while the Nifty index gained 88.55 points (0.36 percent) to finish at 24,666.90. Despite this, foreign institutional investors sold equities worth 476.86 crore rupees on May 13.

Crucially, India’s retail inflation rate eased to a nearly six-year low of 3.16 percent in April, providing the Reserve Bank of India (RBI) with room to consider further interest rate cuts during its upcoming June monetary policy review. Wholesale price inflation also moderated to 0.85 percent, its lowest in over a year, driven by declines in food, fuel, and manufactured goods prices.

Overall, the rupee’s moderate appreciation against the US dollar is a reflection of a confluence of global and domestic factors, including a softer greenback, easing geopolitical tensions, benign inflation, and steady economic fundamentals. The market will closely watch upcoming RBI policy decisions and global developments for further direction in the INR-USD exchange rate.

The Upcoming IPOs in this week and coming weeks are Blue Water Logistics, Unified Data - Tech Solutions, Victory Electric Vehicles International, Borana Weaves, Dar Credit and Capital, Belrise Industries, Wagons Learning.

The Closed IPOs are Accretion Pharmaceuticals, Integrity Infrabuild Developers.

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