- Indian Rupee (INR) falls across the week
- RBI cut rate by 25bps to 6.25%
- US Dollar (USD) rises against its major peers
- US unemployment falls to 4%
The US Dollar to Indian Rupee (USD/INR) exchange rate rose for a fifth straight day on Friday. The pair rose 0.28% in the previous session, settling on Thursday at 87.58. The pair settled 0.06% higher at 87.62 and is in a range of 87.30 to 87.65.
The Indian rupee struggled to an all-time low after the Reserve Bank of India Monetary Policy Committee voted to cut the policy repo rate by 25 basis points to 6.25%. This marked the first rate cut in nearly five years. The RBI projected headline inflation for the FY2025 at 4.8% and estimated GDP growth for the next year to be 6.7%.
The stock market tumbled after the RBI’s rate decision, with the Sensex closing 0.25% lower.
The Rupee remains vulnerable amid broad declines among Asian currencies due to uncertainties surrounding U.S. trade tariffs and ongoing portfolio outflows.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, settled 0.33% higher, at 108.04 on Friday, but booked a loss of 0.3% across the week.
The US dollar rose on Friday after mixed nonfarm payroll reports. The closely watched data showed that payrolls rose by 143,000 in January, below the 170,000 forecast and down from 200 and 66,000 in December. However, the unemployment rate unexpectedly edged down to 4%, according to the Bureau of Labour Statistics, dropping from 4.1% in December.
Average hourly earnings rose 4.1% over the past year, partly thanks to minimum wage increases that took effect last month in 21 states.
The solid jobs market is still providing a solid underpinning for Americans and supports the view the Fed will keep interest rates unchanged in the March meeting.