Indian Rupee Hits 6% Low: Why Stock Market Remains Stable Amid India-US Trade Deal Delays

The Indian Rupee has fallen by around 6% in 2025, following a sharp sell-off after the imposition of tariffs by the US. Despite this, the Indian stock market has shown resilience, with the Nifty 50 index trading within a tight range of 25,250 to 26,300. But what's behind this contrasting performance between the Rupee and the stock market?

Understanding the Rupee's Fall

The Rupee's decline is largely attributed to the delay in the India-US trade deal. Experts believe that the Rupee won't recover until the deal is signed. The Indian stock market, however, has been more stable, thanks to the proactive approach of the Indian government and the participation of domestic investors.

Stock Market Stability

The Indian stock market has been benefited by the government's rationalization of the GST and the reduction of mutual fund fees by SEBI. This has provided liquidity to the market, allowing mutual fund managers to counter the selling pressure from Foreign Institutional Investors (FIIs). The market's stability is also due to the presence of domestic investors, including retail investors and long-term allocators, who step in to absorb selling pressure whenever the market corrects.

Key Factors Affecting the Rupee

• The delay in the India-US trade deal, which is affecting the Rupee's value
• The imposition of tariffs by the US, which is putting pressure on the Rupee
• The lack of liquidity in the currency market, which is making it difficult for the Rupee to recover

Expert Insights

Ponmudi R, CEO of Enrich Money, believes that the Rupee's fall is not a reflection of India's growth momentum, but rather a result of structural pressures and global forces. He also notes that the currency market lacks the balance and liquidity that is present in the stock market, making it more prone to sharp price movements.

Avinash Gorakshkar, a SEBI-registered fundamental equity analyst, attributes the Rupee's decline to the delay in the India-US trade deal and the challenges caused by the trade war in the global merchandise market. He also notes that the Reserve Bank of India's inability to control external triggers has put additional pressure on the Rupee.

Way Forward

Investors are advised to be cautious and do their own research before making any investment decisions. The Indian stock market may continue to show resilience, but the Rupee's value is likely to remain under pressure until the India-US trade deal is signed.

Remember, this is a perspective, not a prediction. It's essential to consult with certified experts before making any investment decisions.