Rupee falls 10 Paise to close at 95.29 against US Dollar

The Indian rupee weakened further on Tuesday, slipping 10 paise to close at 95.29 against the US dollar as rising crude oil prices, persistent foreign fund outflows, and strong demand for the greenback weighed on market sentiment.

At the interbank foreign exchange market, the rupee opened at 95.16 against the dollar and moved within a range of 95.03 to 95.31 during the day. The domestic currency eventually settled at 95.29, extending its losses after declining 34 paise in the previous session.

Forex market experts attributed the weakness in the rupee to renewed geopolitical tensions and a sharp rise in global oil prices. Higher crude prices increase India's import bill and typically put pressure on the domestic currency. Traders also pointed to safe-haven demand for the US dollar amid global uncertainty.

According to analysts, foreign institutional investor (FII) outflows further impacted investor confidence. Exchange data showed that foreign investors sold equities worth Rs 3,911.68 crore on a net basis on Monday, adding pressure on the rupee.

Market participants are now closely watching the Reserve Bank of India's Monetary Policy Committee (MPC) meeting scheduled from June 3 to June 5. The six-member committee, chaired by RBI Governor Sanjay Malhotra, is expected to announce its policy decision on June 5. Analysts believe the central bank's outlook on inflation, growth, and liquidity could influence currency movements in the coming days.

Meanwhile, the dollar index, which measures the US currency against a basket of major global currencies, remained firm near the 99-mark. Despite the rupee's weakness, domestic equity markets ended higher, with the Sensex gaining 382.50 points and the Nifty rising 100.95 points.

On the macroeconomic front, India's industrial production expanded by 4.9 per cent in April, while manufacturing output grew 6.2 per cent. Government data also showed that the fiscal deficit for FY26 was contained at 4.4 per cent of GDP, in line with the budget target.

Analysts expect the rupee to remain under pressure in the near term, with the USD-INR pair likely to trade within a broad range of 94.90 to 95.50 depending on global developments, oil prices, and RBI policy signals.