Rupee recovers 17 paise to close at 88.27/$ on Fed rate cut hopes

The rupee appreciated by 17 paise on Friday, closing at 88.2750 against the US dollar compared to Thursday’s record low of 88.4425.
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The rupee appreciated about 17 paise on Friday from the previous day’s all-time closing low on expectations that the US Fed would restart rate cuts in its upcoming meeting, which could weaken the Dollar.

The Indian currency closed at 88.2750 per US Dollar against the previous record closing low of 88.4425.

Amit Pabari, MD, CR Forex Advisors, observed that the weak-dollar theme, coupled with hopes that U.S.-India trade talks may make progress, could provide some breathing room for the rupee in the coming days. But for now, tariffs remain the overhang that markets cannot ignore.

IFA Global, in a note, observed that the Indian rupee made a modest recovery, boosted by rising expectations that the US Federal Reserve will begin cutting interest rates.

Key US inflation data and signs of a weakening labour market reinforced this view, pushing markets to price in likely rate reductions in September, with 2 more rate cuts of 25 basis points (bps) expected later this year, it said.

The firm, which provides forex & treasury management solutions, underscored that despite the rupee’s gains, the pressure persists from import demand and likely FPI outflows — underscoring that the recovery is fragile and dependent on external cues, especially from the tariff front.

CR Forex Advisors said the emerging market currencies are finding relief on expectations that the US Fed will resume rate cuts at its meeting next week, the European Central Bank’s optimistic outlook, leading to the Euro gaining strength and the Dollar weakening.

Published on September 12, 2025