Overview
- The currency fell to fresh record intraday lows near 90.42–90.56 per dollar before closing around 89.9 on Thursday, with traders citing a softer dollar and suspected spot-market intervention.
- Reports citing sources indicate the RBI is prioritising prevention of disorderly moves over defending any specific level, allowing greater flexibility in the exchange rate.
- Pressure stems from sustained FPI withdrawals this year of roughly $17–18 billion and an October goods trade deficit near $41.7 billion, including a sharp jump in gold imports to about $14.7 billion.
- Government voices said the slide has not fed into inflation, which was extremely low in October, and noted potential export gains, while experts warned costlier imports could squeeze margins and hurt unhedged foreign borrowers.
- Markets are focused on Friday’s MPC statement and signs of movement on an India–US trade deal, with some analysts warning that continued outflows and trade pressures could test higher dollar levels.