The Indian rupee recovered slightly on Monday after a steep fall on Friday, supported by strong intervention from the Reserve Bank of India to curb volatility. The currency traded at 89.16 per U.S. dollar on November 24, gaining 0.35% in a day after briefly touching a record low of 89.48 last week, close to the key 90-per-dollar mark. Reports suggest the RBI sold dollars in both the order-matching system and the non-deliverable forward market to stabilize sentiment.
The rupee had slipped past 88.80 on Friday—a level market participants believe the RBI had been protecting for some time—renewing downward pressure that may continue this week.
Why the rupee is weakening:
RBI Governor Sanjay Malhotra attributed the decline mainly to rising demand for the U.S. dollar, adding that clarity on a pending India–U.S. trade agreement could help ease pressure. Analysts note that delays around the deal are keeping investor confidence subdued.
A strong U.S. dollar is also weighing on the rupee, with the dollar index hovering near a six-month high. Expectations of limited Fed rate cuts this year have pushed U.S. yields higher, hurting emerging-market currencies.
Additionally, India’s record-high October trade deficit and softer exports to the U.S. have contributed to weaker financial inflows, further pressuring the rupee despite RBI’s efforts to manage volatility.