Indian Rupee’s Recent Fluctuations: Nine-Day Rally, Subsequent Dip, and Rebound Amid Global Indicators​

Recently, there have been big changes in the Indian Rupee. These changes are due to a dynamic interaction of local and foreign forces. After a strong nine-day rise, the dollar had a short-term setback before getting stronger again.

Rupee’s Nine-Day Rally and Subsequent Dip

The Indian Rupee went up in value by about 2% in March 2025, ending a nine-day winning run. This increase was mostly due to large investments from foreign portfolios and the return of corporate dollar gains before the end of India’s fiscal year on March 31. On March 24, 2025, the Rupee hit a high point of 85.49 against the U.S. dollar during this time.

But on March 25, the Rupee stopped going up and ended the day 12 paise weaker at 85.75 per U.S. dollar. This drop was caused by exporters, especially oil companies, buying dollars at the end of the month and the dollar index going up a little. In addition, a drop in other regional currencies made the Rupee lose value.

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Rebound Amid Global Economic Indicators

It went up by 9 paise to 85.68 against the U.S. dollar at the start of the trading day on March 26. This comeback was helped by the fact that U.S. consumer confidence data, raised concerns over the U.S. economic outlook and led to a softer dollar. The Conference Board’s index dropped to a four-year low of 92.9, indicating potential weakness in future consumer discretionary spending. ​

Factors Influencing the Rupee’s Performance

Several elements have played a role in the recent performance of the Indian Rupee:

• Foreign Inflows: The Rupee’s appreciation was bolstered by foreign portfolio investors purchasing over $2 billion in Indian equities over four trading days, including more than $600 million on March 25 alone. ​
• Importer Hedging: Importers, especially oil companies, bought dollars at the end of the month, which put pressure on the Rupee and caused it to temporarily fall.
• Global Economic Indicators: Low buyer trust in the U.S. caused the dollar to fall, which helped the Rupee’s recovery.

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Outlook for the Indian Rupee

Analysts are still not sure what will happen with the Indian Rupee because of things like the possibility of new U.S. taxes, slow growth in India, and rising prices. In a change to its previous prediction of 88.50, MUFG now sees the Rupee as “neutral” and thinks it will end 2025 at 87.50 against the U.S. dollar.

To sum up, the recent changes in the Indian Rupee show how complicated the relationship is between the country’s economy, loans from other countries, and global economic data. People in the market should stay alert because these many factors are likely to continue to affect the path of the currency.