The Indian rupee closed almost unchanged on Thursday, 27 November 2025, as intermittent dollar sales by state-run banks offset pressure from corporate debt repayments and routine importer hedging demand. The rupee ended at 89.3050 per U.S. dollar, a marginal decline from 89.27 in the previous session.

Traders say the rupee has stabilized after touching a record low of 89.49 last week, but depreciation risks persist amid weak trade flows, subdued portfolio inflows, and ongoing uncertainty around U.S.-India trade negotiations.

Key Drivers of Rupee Movement

The modest movement in the rupee was primarily due to:

• Dollar outflows from corporate debt repayments and hedging by importers.
• Intervention by state-run banks, which sold dollars intermittently to support the local currency.
• Ongoing caution among traders ahead of concrete developments in U.S.-India trade talks.

A private bank trader noted, “Importer dollar demand and reluctance to take long positions in the rupee will continue to weigh on the currency unless there is clarity on trade agreements.”

Indian Equity Markets Hold Record Highs

Meanwhile, India’s benchmark equity indexes, BSE Sensex and Nifty 50, touched record highs on Thursday, reflecting positive sentiment in domestic markets. However, foreign investors have remained net sellers of Indian stocks in November and throughout the year, limiting further rupee strength.

Global Factors Impacting the Rupee

In broader markets, Asian currencies traded mixed, with the U.S. dollar index rising slightly to 99.69. Despite this, the dollar is set for its worst weekly decline in four months as investors increasingly price in a Federal Reserve interest rate cut in December.

The odds of a 25 basis-point rate cut by the Fed have surged to 85%, up from nearly 40% last week, according to CME’s FedWatch tool. Analysts at ING noted, “This week’s dollar correction reflects convergence toward lower rates following the Fed’s dovish signals, rather than geopolitical shifts.”

Outlook for the Indian Rupee

Analysts expect the rupee to remain sensitive to importer demand, foreign fund flows, and U.S.-India trade developments in the near term. While state bank interventions provide temporary support, the currency could come under pressure if capital outflows persist or if trade uncertainties escalate.

Investors and corporates will be watching:

• Developments in bilateral trade talks between India and the U.S.
• Domestic export-import flows and hedging demand
• Federal Reserve policy signals influencing the dollar-rupee exchange rate