Overview
- The currency hit fresh intraday lows around 90.42–90.56 per dollar before recovering to about 89.9 on Thursday and opened stronger near 89.85 on Friday, a move traders linked to likely RBI dollar sales and a softer greenback.
- Sources cited by Reuters say the RBI is less inclined to defend a specific level and is focused on preventing disorderly moves, with market participants pointing to spot action and possible sell–buy swaps as forward premiums climbed.
- Pressure stems from heavy foreign portfolio outflows this year and a record October merchandise trade deficit of roughly $41.7 billion, driven in part by surging gold and costlier crude imports and uncertainty over an India–US trade deal.
- Opposition leaders pressed the government over the rupee’s slide, while officials including the chief economic adviser said the recent drop has not yet fed into inflation or exports, though analysts warned of higher import costs and stress for unhedged borrowers.
- Outlook remains fragile as UBS lifted its 2026 rupee range forecast to 90–92 per dollar, with markets watching the RBI policy outcome, potential progress on the US trade dispute, and the path of foreign flows.