The domestic currency ended at a three-week low, marking its biggest daily fall since June 8, when it had lost 77 paise in a single session
The rupee posted its steepest single-day decline in over three weeks on Wednesday, weakening 58 paise to close at 95.25 against the US dollar, as aggressive dollar buying by importers, stop-loss triggers and a sharp rise in the dollar index overshadowed support from domestic equities and likely intervention-related dollar sales by state-owned banks.
The domestic currency ended at a three-week low, marking its biggest daily fall since June 8, when it had lost 77 paise in a single session. “The Indian rupee weakened to close at 95.24 per US dollar, extending recent losses as persistent global and domestic headwinds continued to weigh on sentiment,” said Kunal Sodhani, Head Treasury at Shinhan Bank India.
“The primary driver remained broad-based strength in the US dollar, supported by higher US Treasury yields and cautious investor positioning ahead of key US economic data. Weakness across Asian currencies, continued dollar demand from oil importers and corporates, and foreign portfolio outflows added to pressure on the rupee,” he said.
RBI push
Sodhani noted that while the RBI’s recent measures to encourage FCNR(B) deposits are expected to support medium-term dollar inflows, markets believe a significant portion of these inflows could be absorbed into the central bank’s foreign exchange reserves rather than immediately strengthening the spot rupee.
The rupee has now extended its decline from 94.33 per dollar on June 18. Prior to that, it had staged a sharp recovery from its record low of 96.83 on May 20, strengthening nearly 2.6 per cent to reach 94.33 by mid-June.
Wednesday’s decline also made the rupee the worst-performing Asian currency, falling 0.61 per cent, compared with losses of 0.55 per cent in the South Korean won, 0.50 per cent in the Thai baht, and 0.43 per cent in the Philippine peso.
“Despite improving macroeconomic fundamentals, the rupee continues to face near-term pressure. Market participants will closely watch upcoming US economic data, capital flows, crude oil prices and the RBI’s intervention strategy for further direction. For USD/INR, 94.40 remains a key support, while 95.70 is the immediate resistance level,” Sodhani added.
Meanwhile, crude oil prices were largely steady despite uncertainty surrounding US-Iran peace talks, helping prevent a sharper depreciation in the local currency.
Published on July 1, 2026
