Rupee closes lower at 85.77, weighed down by dollar demand and tariff concerns

The Indian rupee fell by 8 paise to close at 85.77 (provisional) against the US dollar on Thursday, pressured by month-end dollar demand from importers and the greenback's recovery against major currencies.
The US dollar strengthened after US President Donald Trump announced a 25% tariff on automotive imports, set to take effect on April 2, news agency PTI reported.
Forex dealers noted that the rupee faced additional pressure due to liquidity concerns, fears over reciprocal tariff measures, and increased demand for the US currency from importers. However, gains in the domestic equity markets and foreign fund inflows helped cushion the rupee's decline.
The rupee opened at 85.90 and briefly touched a high of 85.73 during the day before becoming volatile, hitting a low of 85.93, and eventually settling at 85.77, down by 8 paise from the previous session. On Wednesday, the rupee had gained 3 paise to close at 85.69.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, expected the rupee might continue to face slight downward pressure due to month-end dollar demand from importers and Oil Marketing Companies (OMCs).
"Elevated crude oil prices and a rebound in the US dollar may also weigh on the rupee. However, strong domestic markets and foreign institutional inflows could offer some support," he said. He also expects the USD-INR spot rate to trade in a range of 85.60 to 86.10.
Meanwhile, the dollar index, which measures the greenback's strength against a basket of six major currencies, was down by 0.11% at 104.43. Brent crude, the global oil benchmark, fell 0.46% to $73.45 per barrel.
In the domestic stock market, the 30-share BSE Sensex rose by 317.93 points, or 0.41%, to close at 77,606.43, while the Nifty gained 105.10 points, or 0.45%, to end at 23,591.95. Foreign institutional investors (FIIs) bought equities worth Rs 2,240.55 crore on a net basis on Wednesday, according to exchange data.