Indian Rupee Weakens as RBI Rate Cut Bets Mount

Indian Rupee Weakens as US Dollar Consolidates and RBI Cut Bets Build

INR Slides Toward 85.65 on Global and Domestic Pressures

The Indian Rupee (INR) continued to lose ground against the US Dollar (USD) on Tuesday, with USD/INR trading around 85.65, reversing earlier gains. The Dollar’s modest comeback and local economic headwinds weighed heavily on the Rupee.

Markets are increasingly betting on another rate cut from the Reserve Bank of India (RBI), with State Bank of India (SBI) suggesting a possible 50 basis point (bps) reduction, marking a third consecutive easing move.

Crude Oil, Equities, and FII Outflows Weigh on INR

The decline in the Rupee comes amid:

• Higher global crude oil prices, which strain India’s trade balance.
• Weak equity markets, with BSE Sensex falling 636.24 points to 80,737.51 and Nifty 50 down 174.10 points to 24,542.50.
• Foreign Institutional Investor (FII) outflows, with net selling of ₹2,589.47 crore on Monday alone.

These factors add to investor concerns, pushing INR toward further depreciation.

RBI Policy in Focus

All eyes are now on the upcoming RBI policy meeting, with inflation in check and economic risks rising.

“A 50 bps cut cannot be ruled out, especially if global uncertainty around US tariffs continues,” say Tredu analysts.

The move would be seen as a strong push to support domestic demand and improve liquidity.

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