The Indian rupee opened stronger against US dollar as it strengthened by 39 paise to open at 86.44.

The currency had closed stronger against the US dollar on Tuesday, strengthening by 65 paise to close at 86.83. It gained 13 paise to open at 87.35, recovering from a significant weakening on Monday, when it reached 87.92, due to fresh threats of tariffs on steel and aluminum imports. The US administration’s announcement of a 25% tariff on these imports, along with hints of further action on other goods, had triggered a flight to safety, boosting the dollar.

The rupee closed at 86.8275, with an expected opening of 86.71. The range for the day is expected to be 86.50 to 87.00, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. He advised exporters to sell near 87.50 whenever possible and importers to wait for more dips to buy.

The dollar took a breather, falling to 108.00, while US 10-year yields rose after Federal Reserve Chair Jerome Powell stated there was no rush to cut rates, as the economy was performing well in his testimony to the Senate, Bhansali added.

The Reserve Bank of India intervened heavily to keep the rupee higher at 86.8275, after it reached a high of 86.60. The gap-up opening of 86.62 to 87.03 a few days ago was fully filled on Monday. Bhansali mentioned that the direction of the rupee depends on RBI’s decisions—whether to keep it appreciated, range-bound, or depreciate it by buying dollars.

The market is also awaiting the outcome of the meeting between Prime Minister Modi and President Trump on trade tariffs scheduled for Feb. 12 and 13.

On Tuesday, Chief Economic Advisor V. Anantha Nageswaran stated that the rupee’s depreciation has not hindered India from providing returns to investors. Speaking at the IVCA Conclave 2025, Nageswaran noted that the rupee’s annual depreciation has historically been around 3%. If India maintains an inflation rate of around 3-4%, the decline might slow down significantly, he said. He also pointed out that the rupee’s depreciation is a direct consequence of the dollar’s strength.

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