MUMBAI: The Indian rupee weakened slightly on Friday, pressured by dollar demand from importers and weakness in local shares that have seen an exodus of foreign money over 2025.

The rupee closed lower at 86.7125 against the US dollar after rising to 86.4850 earlier in the session. The currency was up 0.1% week-on-week.

While the currency benefited from a broadly weaker dollar in early trades, persistent dollar buying from foreign banks ate into the gains, a trader at a private bank said.

“The last two days’ price action suggests that unless equity inflows start, dips (on USD/INR) will be short-lived,” the trader added.

Foreign investors have net sold over $11 billion of local stocks over 2025 so far. Benchmark Indian equity indexes, the BSE Sensex and Nifty 50 declined about 0.5% each on the day.

The dollar index was higher at 106.6 after touching a two-month low on Thursday, while Asian currencies were mostly higher by 0.1% to 0.3%.

“We are not in the camp of thinking US data will soften enough to back a dollar downtrend, but the bar for a negative USD reaction to data is not high, and we admit the path to dollar re-appreciation can be bumpy,” ING Bank said in a note.