The Indian rupee plummeted to an unprecedented record low during Monday’s trading session, intensifying concerns over the currency’s stability amidst challenging global trade dynamics. Despite intervention efforts from the Reserve Bank of India (RBI), the currency briefly touched 89.7575 against the US dollar before settling at 89.5475, reflecting a 0.1% daily decline.
Market analysts attribute this deterioration primarily to India’s unique position as one of the few major economies without a comprehensive trade agreement with the United States. This structural disadvantage has created persistent bearish pressure on the currency throughout 2025, even as India maintains its status as the world’s fastest-growing major economy.
The currency’s vulnerability was exacerbated by maturing non-deliverable forward (NDF) positions that triggered substantial selling pressure. Traders confirmed that only aggressive dollar-selling interventions by the central bank prevented the rupee from breaching the psychologically critical 90-per-dollar threshold.
Recent data reveals the RBI’s intensified efforts to stabilize the currency, with short forward dollar positions surging to $63.6 billion in October. This represents the central bank’s most robust defensive maneuver against currency depreciation pressures.
ANZ Bank analysts warn that without tariff reductions, the rupee could weaken further to approximately 91.30 by late 2026. They note that slowing export growth combined with tariffs reaching 50% on Indian exports creates significant risks to India’s current account and balance of payments. The analysis suggests that a potential trade deal reducing tariffs to 15-20% could catalyze a recovery to 88-88.50 levels, though the RBI might counter such strength to rebuild foreign exchange reserves, which currently stand at $688.1 billion.
The rupee’s weakness extended to cross-currency benchmarks, hitting a record low of 12.69 against the offshore Chinese yuan. Meanwhile, the dollar index registered modest declines while Asian currencies displayed mixed performance throughout the trading session.