Wed Dec 17 05:17:44 UTC 2025: Rupee Fluctuates Amid Trade Deal Uncertainty and Foreign Investment Outflows

MUMBAI, December 17, 2025 – The Indian rupee experienced a volatile trading session on Wednesday, December 17, 2025, as pressure from persistent foreign fund outflows and uncertainty surrounding the India-U.S. trade deal was partially offset by easing crude oil prices.

The rupee initially weakened, opening at 91.05 against the U.S. dollar, a 12 paise decline from the previous day’s close. However, it quickly rebounded, appreciating to a high of 89.96 before settling at 90.18 against the dollar at 9:46 a.m. IST. On Tuesday, the rupee had fallen below 91, hitting a low of 91.14 and closing at 90.93.

Forex traders attributed the rupee’s weakness to continuous selling by Foreign Portfolio Investors (FPI) in both equity and debt markets. Foreign investors have reportedly sold billions of dollars worth of Indian assets in recent months, with selling intensifying in the last two months.

Support for the rupee came from Brent crude oil prices, which hovered near multi-year lows of $59 per barrel. Traders cited record non-OPEC supply, weak Chinese economic data, and optimism regarding a potential ceasefire in Ukraine as factors contributing to the drop in oil prices.

Minister of State for Finance Pankaj Chaudhary informed Parliament on Tuesday that the rupee’s depreciation was influenced by the increasing trade deficit and uncertainties surrounding the India-U.S. trade agreement. He noted that a weaker rupee could enhance export competitiveness but might also raise import prices.

Despite the currency fluctuations, the Indian stock market showed positive momentum. The Sensex was up 146.09 points at 84,825.95, while the Nifty gained 62.05 points to reach 25,922.15. However, Foreign Institutional Investors (FIIs) sold equities worth ₹2,381.92 crore on Tuesday, according to exchange data.

Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, predicts a potential move towards 92 for the rupee, citing the lack of progress in the India-U.S. trade deal as a contributing factor to market uncertainty and equity declines.

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