Indian Rupee Hits Record Low, RBI Steps In to Limit Losses
The Indian rupee slipped to a fresh all-time low on Monday, pressured by stalled U.S.–India trade talks and heavy foreign capital outflows, though central bank intervention helped curb sharper declines.
The rupee weakened about 0.3% to 90.74 per dollar, breaking its previous record low. It is now down nearly 6% in 2025, making it the worst-performing Asian currency this year.
Key pressures include:
Prolonged deadlock in trade negotiations with the U.S.
Steep U.S. tariffs weighing on Indian exports
Foreign investors selling over $18 billion worth of Indian stocks year-to-date
Continued outflows from bonds as well
Traders noted that the Reserve Bank of India (RBI) has been intervening selectively to smooth volatility rather than defend a specific level, allowing the market to set prices.
Despite a broadly weaker U.S. dollar this month, the rupee has failed to benefit due to persistent outflows and weak sentiment. Analysts warn that a break above 90.80 could open the door to 91–92 levels if pressure continues.
While a future trade deal could trigger a short-term rebound, analysts say gains may fade if the RBI uses any strength to rebuild foreign exchange reserves, which currently stand near $687 billion, below recent highs.
Indian equity markets also edged lower, reflecting cautious sentiment ahead of key economic data and central bank meetings.
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