The rupee depreciated 22 paise to 90.54 against the US dollar in early trade on Wednesday, retreating after a sharp rally in the previous session amid suspected dollar buying by corporates and importers, traders said.

Rupee pares gain

At the interbank foreign exchange market, the domestic currency opened at 90.35 against the dollar but soon pared gains and slipped to 90.54, marking a 22-paise decline from its previous close.

On Tuesday, the rupee had emerged as the best-performing Asian currency, surging a record 117 paise, or 1.28%, to settle at 90.32 against the US dollar after India and the United States agreed to a trade deal.

Forex traders said sentiment remains cautiously positive following the announcement, but uncertainty persists as the agreement is yet to be formally signed or officially released. “There is no final framework text or documentation so far, which is keeping traders on edge,” a dealer said.

India-US trade deal

Under the proposed India-US trade deal, Washington has agreed to reduce reciprocal tariffs on Indian goods to 18%, a level lower than those imposed on other exporting nations such as China, Bangladesh, and Vietnam. Traders noted that the improved tariff outlook strengthens India’s relative trade position and could support the rupee in the near term.

US President Donald Trump said India would gradually end purchases of Russian crude and increase imports of US energy, including oil and coal, while also potentially sourcing Venezuelan crude oil with US approval.

Prime Minister Narendra Modi on Tuesday described the India-US trade agreement as a “big decision” that would benefit all sections of the country, reiterating that his government acts in the national interest.

Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six major currencies, was marginally lower by 0.02% at 97.41. Brent crude, the global oil benchmark, rose 0.65% to $67.77 per barrel in futures trade.

In the domestic equity market, the BSE Sensex advanced 68.49 points to 83,816.96 in early trade while the Nifty gained 51.90 points to 25,779.45. Foreign Institutional Investors bought equities worth ₹5,236.28 crore on Tuesday, according to exchange data.

India-US deal

Rupee slips 22 paise to 90.54 in early trade despite India-US deal optimism