Overview
- The rupee briefly crossed 90 to the dollar this week and closed at 89.98 on Friday, down about 5% in 2025 and the weakest in Asia, according to market data cited by the Economic Times.
- The Reserve Bank of India has been selling dollars and using forwards to smooth volatility, and it cut the policy rate by 25 basis points on Friday, with economists expecting only a limited currency impact.
- Sitharaman said the currency should "find its own level," pointing to strong macro fundamentals and noting exporters may gain from a softer rupee.
- Economists and market participants highlight uncertainty over a US–India trade deal, steep US tariffs, and foreign portfolio outflows as key drivers, with some expecting a roughly ₹89–91 trading band into year-end unless deal clarity improves.
- The government flagged import-duty reductions and a broader customs clean-up, while analysts note households face higher costs for foreign education, travel and imports, with overall inflation pressures still contained for now.