The Indian rupee fell to a record low on Friday, as concerns over potential US tariffs on India rattled traders. Intervention by the Reserve Bank of India (RBI) likely helped prevent further losses, according to market sources.
The rupee touched 24.0762 against the UAE dirham (88.36 versus the US dollar), surpassing its previous record low of 24.0681 (88.33 against the dollar) set on September 1. It later recovered slightly to 24.0531 (88.2750), down 0.1% for the day.
Traders said the drop was driven by strong dollar demand from foreign banks amid fears of rising US tariffs. “The spike in USD/INR reflects concerns over higher tariffs on India, but state-run banks stepped in above 88.30 to limit losses, likely on behalf of the RBI,” noted a senior bank trader.
With merchant activity muted, trading leaned heavily toward dollar purchases. MUFG analysts forecast that the rupee could slide to 89 by the first quarter of 2026 if tariffs remain high, though they may ease to 25% sometime next year.
Meanwhile, foreign portfolio investors continue to pull out of Indian equities, recording net sales of $1.4 billion in September alone, bringing total outflows this year to over $16 billion.
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