Due to a resurgent dollar index, significant additional tariffs on Indian exports to the US, and ongoing outflows of foreign currency, the Indian rupee is under increasing pressure and is currently trading between Rs87.55 and Rs87.66 per US dollar.
Market data indicates that the value of one US dollar in onshore trade is now between Rs87.55 and Rs87.66, with the Reserve Bank of India (RBI) often intervening to reduce volatility.
The rupee has slowly declined over the last five years, from around Rs74 to the US dollar in mid-2020 to breaking through Rs79 by 2022 due to rising crude and US rate rises, and nudging toward Rs83 in 2024 due to concerns about a global recession. A cumulative fall of almost 13 percent is shown by this year’s decline to the 87-plus threshold.
Demand for safe haven assets and anticipation of more rate cuts by the US Federal Reserve are driving the US dollar’s robust rebound, which is putting pressure on emerging market currencies like the rupee and driving up demand for US dollars.
While the RBI has spent over $9 billion to protect the currency through spot and non-deliverable forward (NDF) market interventions, foreign investors have withdrew more than $4–$10 billion from Indian debt and stocks this year.
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