Indian Rupee Set to Open Nearly Flat as Dollar Weakens Amid Global Market Turbulence

Mumbai, May 23, 2025 – The Indian rupee is expected to open almost unchanged on Friday, following a period of volatility in domestic and global markets, as weakness in the US dollar provides some stability. This comes amid a backdrop of sharp fluctuations in Indian equities and persistent global economic concerns.

Dollar Weakness Offers Brief Support

The US dollar index has softened in recent sessions, providing some relief to emerging market currencies like the Indian rupee. A weaker dollar often supports the rupee’s value by making imports cheaper and attracting foreign capital flows. Despite this, global investor sentiment has been cautious due to rising US debt and increasing bond yields.

Volatile Week for Indian Equities

The Indian financial markets have experienced significant swings over the past two weeks:

– May 15, 2025: Indian benchmark indices rebounded sharply, with the Sensex rising by 1,200 points and the Nifty gaining 395 points at the close of trading. ([Read More](https://www.thehindubusinessline.com/markets/share-market-nifty-sensex-highlights-15-may-2025/article69575132.ece))
– May 20, 2025: Markets turned bearish, with the BSE Sensex shedding 872.98 points to close at 81,186.44. The Nifty ended below the 24,700 mark, dragged down by losses in major stocks such as HDFC Bank, Reliance Industries, and ICICI Bank. ([Read More](https://www.thehindubusinessline.com/markets/stock-market-highlights-20-may-2025/article69594411.ece))
– May 22, 2025: The downward trend continued as both the Sensex and Nifty slid nearly 1%, influenced by concerns around the growing US debt burden and rising US bond yields. The BSE Sensex closed at 80,951.99, falling by 644.64 points, or 0.79%. ([Read More](https://www.thehindubusinessline.com/markets/stock-market-highlights-22-may-2025/article69602165.ece))

This volatility was compounded by geopolitical risks earlier in the month, including Operation Sindoor, where missile strikes by India heightened tensions in the region and led to a choppy session on May 7, 2025. Eventually, the indices ended slightly higher after the initial shock. ([Read More](https://www.thehindubusinessline.com/markets/stock-market-highlights-7-may-2025/article69545260.ece))

Rupee Outlook Amid Uncertainty

Despite the recent weakness in Indian equities, the rupee’s opening is expected to remain largely flat due to the counterbalancing effect of a softening dollar. However, market experts remain cautious as risks from US fiscal dynamics and global geopolitical events continue to loom over emerging market currencies.

The near-term trajectory of the rupee will likely be influenced by a combination of foreign fund flows, crude oil prices, US economic data, and domestic growth indicators. Investors are also closely watching global central bank moves and interest rate decisions, as these could impact both the dollar’s strength and emerging market sentiment.

Summary

The Indian rupee is poised to open nearly flat today, stabilised by recent dollar weakness, even as global and domestic financial markets remain volatile due to external economic pressures and geopolitical developments. Traders and investors are advised to monitor global cues and domestic policy actions for future currency movements.