Finance
The Indian rupee closed higher against the dollar on Monday, as the greenback suffered fresh pressure after Moody’s downgraded the US debt.
According to Bloomberg data, the domestic currency closed 12 paise higher at 85.40 against the greenback, up from 85.52 on Friday.
Moody’s reduced the US rating from AAA to AA1, citing concerns about the increasing debt, which could worsen under President Donald Trump’s tax cuts. However, in an interview, Treasury Secretary Scott Bessent stated that “Moody’s is a lagging indicator — that’s what everyone thinks of credit agencies,” dismissing any debt concerns.
Markets may take the downgrading as a red flag for fiscal recklessness, putting negative pressure on the dollar, according to Amit Pabari, managing director of CR Forex Advisors. The dollar Index, which measures the greenback against a basket of six major currencies, was down 0.90 percent at 100.18.
Asian markets fell alongside the dollar and US futures contracts after Moody’s Ratings downgraded the US government’s credit rating.
If the dollar falls more owing to fears over the US credit rating reduction, the rupee may rise, according to Pabari.
Further, a strong wave of foreign inflows into Indian equity markets indicates renewed optimism about India’s macroeconomic stability, he said. “This uptick in investor sentiment provided much-needed support to the rupee amid a volatile global backdrop.”
So far in the 2025 calendar year, the rupee has maintained steady versus the US dollar while depreciating dramatically against the euro and pound. It plummeted 6.83 percent and 5.44 percent versus the euro and pound, respectively, as those currencies strengthened strongly against the dollar over the period.
Crude oil prices continued to fall despite efforts to end the Ukraine conflict. Brent crude prices fell 0.70 percent to $64.95 per barrel, while WTI crude prices fell 0.74 percent to 62.03 as of 3:35 PM.
Source: BS
