Overview

• The currency fell about 0.65% to finish near 88.20, surpassing February’s 87.95 trough for a new all-time low.
• Breaching 87.95 triggered stop-loss orders that drove an intraday drop to 88.31 before short covering steadied the close.
• In FY26 the rupee has weakened roughly 3.2% against the dollar, making it Asia’s worst-performing currency so far this year.
• Market participants point to equity outflows, month-end dollar demand linked to oil purchases, rupee–yuan dynamics, and a perceived RBI tolerance for depreciation as added pressures.
• With $690.7 billion in reserves as of August 22, the RBI is expected to smooth excessive volatility rather than hold a line on any level, while some analysts see downside risk toward 89.5 or potential recovery toward 86.5 based on tariff developments.