Indian Rupee Declines Marginally to 95.23 Against US Dollar

Indian Rupee Weighed Down by Persistent Dollar Demand

The Indian rupee opened 2 paise lower at 95.23 against the US dollar on Monday, 6 July, as the dollar's strength and weakness across Asian currencies continued to exert pressure on sentiment despite softer crude oil prices. The local currency came under pressure after declining nearly 1% last week, driven by arbitrage-related outflows, routine dollar purchases by importers, and a stronger US dollar amid expectations that the US Federal Reserve could keep interest rates higher for longer.

According to a Reuters report, although the dollar's recent rally has paused following weaker-than-expected US June jobs data, traders expect only limited relief for the rupee. They noted that the currency has remained under pressure even as crude oil prices have softened, indicating strong underlying demand for dollars. The Reserve Bank of India (RBI) has reportedly been selling dollars through state-run banks to defend the 94.80-95.00 zone, but the rupee's continued weakness highlights the resilience of underlying dollar demand.