Indian Rupee Falls to Lowest on Record

The Indian rupee weakened toward 91 per dollar, hitting its weakest level in over two weeks, weighed by broad dollar strength. The rupee slipped alongside other emerging-market peers as the dollar held gains on strong US economic data. At the same time, thin liquidity in Asian markets amid the holiday period made regional currencies more sensitive to modest order flows. Persistent importer and hedging demand for dollars, coupled with elevated import costs in oil and commodities, also kept USD/INR under pressure. Meanwhile, lingering support from the Reserve Bank of India’s past interventions and state-bank dollar sales, along with improved foreign portfolio inflows and optimism from recent trade deals, helped keep the rupee within its medium-term trading range. Market participants continue to monitor import flows, global commodity prices, and domestic policy signals for further cues on rupee movements.

The Indian rupee steadied around 90.7 per dollar, maintaining a narrow range, amid continued support from the Reserve Bank of India. The central bank has repeatedly intervened in the 90.70–90.80 zone, offering dollars to absorb demand and prevent sharp swings. Traders noted that this consistent presence provides a clear signal of the RBI’s comfort level with the pair, limiting speculative pressure. At the same time, India’s recent trade agreements with the United States and the European Union, along with a growth-focused federal budget, provide a broader backdrop. This underpins investor confidence and supports potential capital inflows, sustaining the currency's stability. Meanwhile, mild weakness across Asian currencies and a firm dollar index provided limited headwinds, keeping the rupee range-bound. Market participants are also watching the Federal Reserve’s January meeting minutes and upcoming US economic data for cues on the broader policy trajectory.

The Indian rupee slipped to around 90.7 per dollar, retreating from the previous session, pressured by importer hedging and weak domestic equities. Persistent dollar demand from importers covering obligations at lower rupee levels added immediate buying pressure. At the same time, weak domestic equities and erratic foreign flows, including over $800 million of equity sales on Friday, limited any post-US-India trade deal recovery and reinforced rupee weakness. The currency also tracked weaker Asian peers amid a broader risk-off mood ahead of key US data. Last week’s surprise RBI intervention, supported by dollar sales from state-run banks, helped signal a preferred trading range near 91 and cap further losses, though one-time dollar payments and ongoing hedging activity kept the currency under strain. The lack of follow-through after intervention underscores that selling pressure persists. Traders expect the rupee to remain supported near 90.60–90.65, with resistance around 91.