Overview

• The currency marked a fresh record near 88.45 to the dollar on Thursday before a modest rebound to a provisional 88.28 close on Friday.
• Dealers cite sustained foreign portfolio outflows and strong dollar buying by importers as the primary pressures on the exchange rate.
• FPI selling since July is estimated at roughly ₹65,000 crore, a wave that has left the rupee underperforming most Asian peers in FY26.
• Market participants say the central bank has become more tolerant of weakness, stepping in mainly to curb excessive volatility rather than defend a level.
• US inflation data reinforced expectations of a Federal Reserve rate cut next week, offering some support, though tariff-related trade uncertainty limits relief and keeps the near-term USD/INR range around 88.0–88.6.