Strong dollar demand by banks weakens rupee by 28 paise

ET BureauLast Updated: Jul 01, 2025, 05:23:00 AM IST

Synopsis

The Indian rupee depreciated to 85.75 against the dollar on Monday, influenced by robust dollar demand from both foreign and domestic banks. Despite a weakening dollar index and gains in other Asian currencies, the rupee's decline was tempered by likely RBI intervention through state-run banks. The rupee traded within a narrow band, impacted by oil companies and importer demand.

Mumbai: The Indian rupee weakened 28 paise to 85.75 per dollar on Monday due to strong dollar demand by both foreign and domestic banks, even as other Asian currencies strengthened amid a weaker dollar index. The domestic unit had previously closed at 85.47/$1.

The Reserve Bank of India likely intervened by purchasing dollars via state run banks, traders said. The rupee traded in a range of 85.44/$1 to 85.78/$1, LSEG data showed.

Dollar index was trading near its 3-year low at 97.1. "There was dollar buying by nationalised banks, likely on behalf of RBI. Oil companies and importer dollar demand also kept the rupee in a small range," said Anil Bhansali, head-treasury, Finrex Treasury Advisors.

Other Asian currencies such as the Taiwan dollar and Korean won have risen about nearly 13% and 8% year-to-date, respectively, while the Chinese yuan-a closely tracked peer of the rupee, is up over 2%, LSEG data showed.

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