February 13, 2025
New Delhi, India
USDINR Today
The Indian Rupee (INR) strengthened on Thursday, supported by a weaker US Dollar (USD) and strong intervention from the Reserve Bank of India (RBI). Additionally, a decline in crude oil prices—following US President Donald Trump’s talks with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy—provided relief to the INR, as India is the world’s third-largest crude consumer.
Market Drivers and Challenges
Despite these gains, the INR faces pressure from:
- Renewed USD demand
- Maturity positions in the non-deliverable forwards (NDF) segment
- Equity sales by foreign investors
India’s Prime Minister Narendra Modi is also set to meet Trump administration officials, including Elon Musk, during his Washington visit. Discussions are expected to cover Tesla’s expansion in India and Starlink’s potential entry.
Key Economic Indicators
- India’s Retail Inflation: The Consumer Price Index (CPI) fell to 4.31% in January, down from 5.22% in December, beating market expectations of 4.6%, according to the Ministry of Statistics & Programme Implementation.
- US Inflation: The US CPI rose 3.0% year-on-year in January, above the 2.9% forecast, while core CPI climbed to 3.3% (vs. 3.1% expected). On a monthly basis, headline CPI jumped to 0.5% from 0.4%, adding pressure on the Federal Reserve’s rate-cut plans.
- Federal Reserve Outlook: Traders now expect only one quarter-point rate cut this year, down from two. Fed Chair Jerome Powell acknowledged progress on inflation but emphasized that more work remains.
Trade and Policy Developments
According to Reuters, Modi is preparing to reduce tariffs in multiple sectors ahead of his meeting with Trump, aiming to avoid a trade war.
Outlook
Investors will focus on:
- PM Modi’s meetings with US officials
- US Producer Price Index (PPI) and Initial Jobless Claims data
The RBI’s continued intervention will likely play a crucial role in limiting INR volatility as global factors unfold.
Check Latest Market News
Disclaimer:
CurrencyVeda provides this news article for informational purposes only. We do not offer investment advice or recommendations. Before making any investment decisions, please conduct thorough research, consult with financial experts, and carefully consider your financial situation, risk tolerance, and investment goals. Investing in the stock market carries risks, and it’s essential to make informed choices based on your individual circumstances. CurrencyVeda is not liable for any actions taken based on the information provided in this article.
