Rupee will marginally depreciate against USD in CY25: Report

In CY25, the Indian Rupee (INR) is expected to experience marginal depreciation, largely driven by continued volatility in FPI flows and the likelihood of a stronger U.S. dollar, according to a Bank of Baroda report.

The INR depreciated by 2.8 per cent in CY24 but still outperformed many of its peers. The Reserve Bank of India (RBI) has actively intervened in the forex market to manage currency fluctuations. 

PTI Mumbai

The rupee depreciated 11 paise to close at a record low of 85.75 against the US dollar on Thursday, as strong dollar demand from importers and foreign fund outflows dented investor sentiments.

Forex traders said the dollar gained against most currencies during 2024 and continued to remain on a strong footing this year. Moreover, persistent foreign fund outflows further dented investors' sentiments.

Additionally, global markets are expected to see low volumes as the holiday season is underway in major economies like those in Europe.

At the interbank foreign exchange, the rupee opened on a weak note and sank to an intra-day low of 85.79 while registering a high of 85.68 against the American currency.

The local unit settled for the day at a record low of 85.75, registering a fall of 11 paise over its previous close amid a sharp recovery in domestic equities. On Wednesday, the rupee settled flat at 85.64 against the US dollar.