Mumbai: The Indian rupee opened the week on a weaker note, falling 10 paise to 95.28 against the US dollar in early trade on Monday. The decline came amid a stronger US dollar overseas and lingering geopolitical uncertainties, which continued to weigh on investor sentiment.

The rupee opened at 95.25 in the interbank foreign exchange market before slipping further to 95.28, partially erasing the 17-paise gain it had registered in the previous trading session.

Stronger dollar weighs on rupee

Forex market participants said the strengthening of the US dollar and uncertainty surrounding global developments, including the progress of US-Iran peace talks, kept pressure on emerging market currencies.

According to market experts, the Reserve Bank of India (RBI) is expected to use fresh foreign capital inflows to rebuild the country’s foreign exchange reserves rather than allowing the rupee to strengthen significantly.

Amit Pabari, Managing Director of CR Forex Advisors, said the rupee’s inability to gain despite favourable global cues reflected underlying weakness.

He noted that while falling crude oil prices and a softer dollar would normally support the Indian currency, the rupee failed to capitalise on those factors. He added that any fresh negative trigger could push the USD-INR exchange rate towards the 95.80–96.00 range, while support is expected around 94.80–95.00.

Forex reserves decline

Separately, the RBI reported that India’s foreign exchange reserves fell by $5.654 billion to $666.933 billion during the week ended June 26. The decline followed a modest increase in the previous week and comes after reserves had reached a record high of $728.494 billion earlier this year before easing amid global market volatility.

Stock markets remain positive

Despite the weaker rupee, Indian equity markets opened on a positive note. The BSE Sensex rose more than 300 points in early trade, while the NSE Nifty gained over 99 points. Foreign institutional investors also remained net buyers, purchasing equities worth ₹1,355.33 crore during the previous trading session, reflecting continued confidence in Indian markets.