The rupee declined 10 paise to close at 85.48 (provisional) against the US dollar on Thursday due to a strong American currency against major crosses overseas and rising global crude oil prices.
However, positive domestic equity market and foreign fund inflows supported the local currency and restricted its slide, forex traders said.
At the interbank foreign exchange, the domestic unit opened at 85.56 and touched the intra-day low of 85.62 against the greenback. The unit hit the day's high of 85.40 before ending the session at 85.48 (provisional) against the dollar, 12 paise lower from its previous close.
The rupee ended Wednesday's session two paise higher at 85.38 against the dollar.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said a surge in the US dollar index and crude oil prices weighed on the rupee.
"Month-end dollar demand and FII outflows may also pressurise the rupee. USD-INR spot price is expected to trade in a range of Rs 85.15 to Rs 85.80," he said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.11 per cent at 99.89.
Analysts said the American currency index gained after a US federal court blocked President Donald Trump's sweeping reciprocal tariff order, fuelling hope of easing global trade uncertainties.
Brent crude, the global oil benchmark, climbed 1.25 per cent to USD 65.71 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex rose 320.70 points, or 0.39 per cent, to close at 81,633.02, while the Nifty went up 81.15 points, or 0.33 per cent, to 24,833.60.
Foreign institutional investors (FIIs) purchased equities worth Rs 4,662.92 crore on a net basis on Wednesday, according to exchange data.
The Reserve Bank, in its latest annual report on Thursday, said the country is poised to remain the fastest-growing major economy in the world even in FY26.
According to official data released on Wednesday, India's industrial production growth slowed to 2.7 per cent in April 2025 due to poor performance of manufacturing, mining and power sectors.
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