The Indian Rupee (INR) has faced significant challenges in recent months, notably hitting a record low against the US dollar at 88.62 on September 23, 2025. This decline has been exacerbated by increased US H-1B visa fees and a reduction in foreign equity flows, which analysts indicate are key factors negatively influencing investor sentiment towards the INR.
In response to this downward pressure, the Reserve Bank of India (RBI) has actively intervened in the markets, notably expanding its short dollar forward positions by $6 billion in October to stabilize the currency. This move signals the central bank's commitment to defending the INR amid mounting pressures from persistent importer demand for dollars and concerns surrounding US tariffs and immigration policies.
Additionally, a recent report highlighted that weak manufacturing exports and a narrowing policy rate differential with the US could further exacerbate the rupee's challenges. These developments point to a difficult trading environment for the INR as it struggles to maintain its value.
Looking at recent exchange rates, the INR to USD stands at 0.011282, slightly below its three-month average and trading within a stable range of 2.1%. In contrast, the INR to EUR has risen to 0.009736, above its three-month average, while the INR to GBP trades at 0.008580, 1.3% above its average. Notably, the INR to JPY has reached a 90-day high of 1.7521, significantly above its average, indicating that while some currency pairs show resilience, others, particularly against the US dollar, remain under pressure.
These market dynamics indicate that individuals and businesses involved in international transactions should remain vigilant as they navigate the volatile currency environment, with ongoing developments in policy and economic conditions likely to have a profound impact on exchange rates moving forward.
