Turbulent Times for the Rupee Amid Dollar Demand and FII Outflows

The Indian rupee settled flat at 86.62 against the US dollar amid positive domestic equities being offset by foreign fund outflows and month-end dollar demand. Forex pressures persist due to consistent currency strength overseas and import necessities. Meanwhile, economic outlook anticipates strategic fiscal policies.

The rupee ended the trading session flat at 86.62 against the US dollar on Friday, despite the domestic equities' positive performance. This was due to relentless outflows of foreign funds and heightened dollar demand by month-end.

Analysts highlighted that the rupee felt the pressure from ongoing foreign investments moving out and the strong dollar in international markets. Persisting dollar demand from oil importers and a weaker risk appetite also added to the currency strain.

Market anticipation grows as traders eye the upcoming Union Budget and potential government measures in response. While the domestic equities saw gains, the rupee remained under pressure, showing the delicate balance between market conditions and global financial dynamics.

(With inputs from agencies.)