📰 Today’s Highlights – 28 July 2025
The Indian rupee ended another challenging week at ₹86.5150/USD, marking a 0.4% decline, pressured by foreign portfolio outflows and uncertainty over a U.S.–India trade pact — though exporter-related dollar sales helped contain losses.
Markets are cautious ahead of key events: the Federal Reserve’s policy decision, Chair Powell’s commentary, a looming August 1 reciprocal tariff deadline, and U.S. labor/inflation data releases.
Separately, India and New Zealand concluded their second round of FTA talks in Delhi (July 14–25), with the third round scheduled in New Zealand this September to boost trade, investment and services partnerships.
Lastly, FX strategists at Barclays and Bank of America have offered contrasting forecasts: Barclays sees the rupee’s recent drop as “overdone” near the ₹86.50–87.00 band, whereas BoA remains bullish longer-term, expecting it to strengthen towards ₹84 by late 2025. Both flagged that current REER valuations suggest the rupee is undervalued.
Daily Current Affairs – MCQs (28 July 2025)
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**At what level did the rupee close today?**A) ₹86.30B) ₹86.40C) ₹86.5150D) ₹86.7000Answer: C) ₹86.5150Explanation: The rupee ended the week at ₹86.5150, down 0.4% amid weak equity markets and foreign outflows.
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**What caused the rupee to weaken again?**A) Oil price surgeB) Rising exportsC) FII outflows and lack of a U.S.–India trade breakthroughD) RBI tighteningAnswer: C) FII outflows and delayed U.S.–India trade dealExplanation: Foreign investors pulling out and stalled trade talks with the U.S. weighed on the rupee.
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**Which events are likely to shape markets next week?**A) RBI board meetingB) Fed and BoJ policy decisions, and the U.S. tariff deadlineC) India’s monsoon forecastD) India’s fiscal budgetAnswer: B) Fed & BoJ policy decisions, plus the August 1 U.S. tariff deadlineExplanation: Investors are watching these global events closely to gauge risk appetite and currency movements.
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**What was the timeline of India–New Zealand FTA negotiations?**A) March to June 2025B) July 14–25, 2025C) A single day on 26 JulyD) May 2025 onlyAnswer: B) July 14–25, 2025Explanation: The second round took place in Delhi during this period, covering goods, services, and investment.
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**When is the next round of the India–New Zealand FTA talks scheduled?**A) August in DelhiB) September in New ZealandC) October virtuallyD) Not yet announcedAnswer: B) September in New ZealandExplanation: The third round is slated for September in New Zealand to advance the comprehensive deal.
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**What contrasting views did analysts at Barclays and BofA express?**A) One sees weakness near ₹86.50–87, the other near ₹85B) Both see strength to ₹84C) One sees overdone weakness near ₹86.50–87, the other expects strength to ₹84D) Both expect continued weakness to ₹88Answer: C) Barclays sees overdone weakness near ₹86.50–87; BoA expects eventual strength toward ₹84Explanation: Barclays argues the dip is nearing limits; BoA given capital inflows and a weaker dollar, sees potential strength.
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**What indicator supports that the rupee is undervalued?**A) Real Effective Exchange Rate (REER) near 100.36B) RBI reserve levelsC) India's GDP growthD) U.S. bond yieldsAnswer: A) REER around 100.36 suggests undervaluationExplanation: Both analysts flagged REER readings lowest since May 2023, indicating improved FX competitiveness.
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**How much did the rupee fall over the past week?**A) 0.2%B) 0.4%C) 1.0%D) 1.5%Answer: B) 0.4%Explanation: The rupee slid around 0.4% over the week ending at ₹86.5150.
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**Which firm sold dollars to curb further rupee losses?**A) RBIB) Private banks/exporter clientsC) Foreign banksD) MNC treasury unitsAnswer: B) Domestic banks/exporter-client dollar salesExplanation: Local banks, likely on behalf of exporters, sold dollars to limit intraday depreciation.
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**Which of the following best describes the current rupee outlook?**A) Bold appreciation aheadB) Rangebound with downward bias near ₹86.30–87C) Crisis-level volatilityD) Steady strengthening to ₹83Answer: B) Rangebound with mildly bearish bias near ₹86.30–87Explanation: Analysts see a slight downward drift; forward rates and FII sentiment suggest testing support near ₹86.70–87 next week.
✅ Summary:
Today’s quiz spotlights rupee weakness amid foreign outflows and trade uncertainty, monitoring of Fed/BoJ and trade deadlines ahead, progress in India–New Zealand FTA negotiations, and diverging views from analysts on currency valuation and future trends.
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