Rupee Opens Higher as Inflation Eases in India and US

By siliconindia  |  Wednesday, August 13, 2025

Rupee Opens Higher as Inflation Eases in India and US
  • Rupee up 5 paise to 87.65/USD on August 13, supported by easing inflation trends.
  • India’s retail inflation drops to 8-year low of 1.55% in July; food inflation at -1.8%.
  • US CPI steady at 2.7% YoY in July, keeping rate-cut hopes alive for the Fed.
The Indian rupee opened 5 paise higher on August 13 at 87.65 against the US dollar, compared to the previous close of 87.70, supported by easing domestic retail inflation and subdued US inflation data.
The latest US inflation report indicated that President Donald Trump’s tariff regime has yet to significantly impact consumer prices. The US consumer price index (CPI) rose 2.7% year-on-year in July, unchanged from June, according to the US Department of Labour. This stability could give the US Federal Reserve room to consider an interest rate cut in its next policy meeting.
Domestically, investor sentiment was buoyed by India’s retail inflation dropping to an eight-year low of 1.55% in July, down from 2.1% in June, as per official data released on August 12. This marks the first time since January 2019 that inflation has fallen below the 2% mark, extending a six-month streak of sub-4% readings and holding below 3% since April.
Food inflation remained in negative territory for the second consecutive month, with July’s figure at -1.8% compared to -1.1% in June. The deeper deflation was driven by lower prices of pulses, vegetables, cereals, eggs, sugar, and reduced transport costs. The July reading is the lowest since January 2019, adding further comfort to the macroeconomic outlook.
On the technical front, traders are watching key levels closely. “For USDINR, 87.45 acts as a support while 87.88 a resistance”, said Kunal Sodhani, Head of Treasury at Shinhan Bank.
With both global and domestic inflation pressures easing, the rupee’s near-term trajectory may hinge on the Federal Reserve’s policy signals and global market sentiment.

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