The Rupee appreciated 16 paise to settle at 85.39 against the U.S. dollar on June 2, 2025. File
| Photo Credit: Reuters

The Rupee appreciated 16 paise to settle at 85.39 (provisional) against the U.S. dollar on Monday (June 2, 2025), supported by a weak American currency and on expectations of a further reduction in key interest rate by the Reserve Bank.

However, a sharp gain in the local unit was prevented due to volatile equity markets, outflow of foreign funds and higher crude oil prices, forex traders said.

RBI’s Monetary Policy Committee (MPC) will begin the deliberations on its next bi-monthly policy on June 4 and the outcome is scheduled to be announced on June 6.

At the interbank foreign exchange, the domestic unit opened at 85.55 and moved between a high of 85.30 and low of 85.55 against the greenback during the day. The unit ended the session at 85.39 (provisional), registering a gain of 16 paise from its previous closing level.

On Friday (May 30, 2025), the Rupee ended 7 paise lower at 85.55 against the dollar.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan Choudhary said that the surge in crude oil prices weighed on the Rupee at higher levels.

Brent Crude, the global oil benchmark, climbed 3.44% to $64.94 per barrel in futures trade.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.55% at 98.71.

According to analysts, the U.S. dollar fell on trade uncertainty after U.S. President Donald Trump announced plans to double duties to 50% on import of steel and aluminium.

Meanwhile, a monthly survey released on Monday (June 2, 2025) showed India’s manufacturing sector growth fell to a three-month low in May, restricted by inflationary pressures, softer demand and heightened geopolitical conditions.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell from 58.2 in April to 57.6 in May, highlighting the weakest improvement in operating conditions since February.

In the domestic equity market, the 30-share BSE Sensex fell 77.26 points, or 0.09%, to close at 81,373.75, while the Nifty declined 34.10 points, or 0.14%, to 24,716.60.

Foreign institutional investors (FIIs) sold equities worth Rs 6,449.74 crore on a net basis on Friday, according to exchange data.

The latest government data released on Friday (May 30, 2025) showed the Indian economy expanded at a faster pace than expected in the last quarter of the 2024-25 fiscal.

The GDP growth rate of 7.4% in the January-March period of FY25 reflected a strong cyclical rebound that was helped by a rise in private consumption and robust growth in construction and manufacturing.

The government also managed to meet its fiscal deficit target of 4.8% of the GDP for 2024-25, according to the provisional data released by the Controller General of Accounts on Friday (May 30, 2025).

Moreover, the country’s gross GST collection remained above the ₹2 lakh crore mark for the second month in a row, rising 16.4% in May to over ₹2.01 lakh crore. Goods and Services Tax (GST) collection had touched a record high of ₹2.37 lakh crore in April.

As per the Reserve Bank’s weekly data released on Friday (May 30, 2025) showed India’s forex reserves jumped by $6.992 billion to $692.721 billion during the week ended May 23. The reserve had dropped by $4.888 billion to $685.729 billion in the preceding week.