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Indian Rupee near record low: The Indian rupee continued to reel under pressure, touching Rs 88.31 against the U.S. dollar on Friday, its lowest level on record before opening slightly weaker at Rs 88.23 on Monday. The latest slide has raised concerns that the currency could fall further, with some analysts predicting a potential Rs 90-per-dollar scenario by the end of 2025.
The rupee has now depreciated 3.15 per cent in the current financial year and 3.01 per cent since January, making it the worst-performing currency in Asia so far this year.
Why the Indian Rupee is Falling?
Currency markets are grappling with a host of negative triggers. The most significant of these is the reinstatement of steep 50 per cent U.S. tariffs on several Indian exports—including garments, chemicals, jewellery, and sporting goods—which has hurt trade sentiment and dimmed export prospects.
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At the same time, foreign portfolio investors (FPIs) have been pulling out of Indian equities, with an estimated ₹95,000 crore withdrawn over the last two months. This sustained selling pressure has impacted both the stock market and the currency.
Adding to the strain is the speculative demand for dollars amid global uncertainty. Traders say rising hedging activity and a stronger greenback have pushed the rupee lower, while weakness in other Asian currencies has also contributed to the drag.
Indian Rupee Performance Snapshot: A Steady Decline
Down 0.75 per cent in August
Down 3.2 per cent over the past three months
Down 5.2 per cent year-on-year
Weakest weekly close since May 4
Sharpest one-day fall since May 8
Four consecutive months of depreciation
Can RBI Step In?
The Reserve Bank of India (RBI) has so far avoided aggressive intervention, but market participants believe its actions will be closely watched in the coming weeks. A weaker rupee, while negative for inflation and import-heavy sectors, could support exporters—particularly in IT, pharmaceuticals, and manufacturing.
Some analysts argue that India’s strong GDP growth of 7.8 per cent in Q1 may act as a buffer, preventing a complete breakdown in investor confidence. Others believe the RBI may choose to defend key levels if volatility spikes.
Can Rupee Touch Rs 90? Analysts Remain Divided
Opinions remain split on how far the rupee could fall:
Bearish view: If FPI outflows continue, tariffs remain, and the dollar index strengthens, the rupee could breach Rs 90 per dollar by the end of 2025.
Balanced view: Strong domestic growth, a comfortable forex reserve buffer, and targeted RBI action could keep the rupee in the Rs 87–88.5 range.
What to Watch Going Forward
1) RBI’s policy signals or direct intervention
2) India’s export performance post-tariffs
3) FPI trends in equity and debt markets
4) Global risk appetite and U.S. bond yields
5) Dollar index movement and oil prices
6) Geopolitical developments including the SCO Summit
English (US) ·