Rupee posts weekly fall despite RBI rate hike amid weak foreign flows

The Indian rupee closed at 96.73 against the US dollar in recent trading, posting a weekly decline despite the Reserve Bank of India's rate hike. The currency remained vulnerable to downward pressure, with support coming only from dollar sales by state-run banks.

Analysts anticipate further weakness in the rupee given challenging market conditions and adverse capital flows. The currency's struggles have been compounded by a decline in India's foreign exchange reserves over the past four weeks, limiting its resilience.

The rupee continues to hover close to record lows, reflecting broader concerns over external demand and investor sentiment. Market observers expect the currency to face sustained pressure unless there is a reversal in foreign fund flows or a stabilization in global risk appetite.