The Indian rupee inched lower on the first day of 2026, weighed by routine dollar demand from corporates, while thin volume trade limited moves, according to traders. The rupee declined to 89.9525 per U.S. dollar, down about 0.1% from Wednesday.
Trading volumes were subdued due to New Year holidays in major markets, leaving routine flows the primary driver of price action, traders said.
Thursday's price action reflects the broader pattern seen through much of 2025, where underlying demand–supply dynamics, kept the rupee under pressure.
"While the day's price action shouldn't be over-interpreted for obvious reasons, it does reflect how the last year played out. The key level is clearly 90, and a break above that could trigger incremental buying (of dollars)," a trader said.
The trader said he is watching equity flows to assess whether this year shapes up any differently from 2025, when foreign investors pulled out record amounts from Indian equities.
An improvement in equity flows, he said, would be key to alleviating the familiar demand–supply pressures that weighed on the rupee for much of last year. Indian equities opened the year on a mildly positive note on Thursday, shrugging off the pullback on Wall Street in the final session of 2025.
