The Indian Rupee (INR) has recently displayed some resilience following a significant intervention by the Reserve Bank of India (RBI) on October 15, 2025. The central bank sold between $3 billion to $5 billion in the foreign exchange market, which led to the rupee's largest single-day gain in four months. This move has helped stabilize the currency amidst pressures from recent U.S. tariffs on Indian exports and rising gold import costs.
Market sentiment also shifted positively for the rupee, evidenced by a notable decrease in the 1-month 25-delta risk-reversal for the USD/INR pair, dropping to -0.8, the lowest level since 2012. This indicates growing demand for rupee call options, suggesting increased confidence in the currency's potential recovery.
However, the backdrop of U.S.-India trade tensions remains a concern. In August, the U.S. imposed substantial tariffs, including a punitive measure against India's oil imports from Russia. Analysts have characterized these moves as "unfair," contributing to an unstable trading environment. The impact of U.S. monetary policy, particularly interest rate movements, continues to play a crucial role in shaping the USD/INR exchange rate, with a stronger U.S. dollar exerting downward pressure on the rupee.
From a technical standpoint, the INR to USD exchange rate stands at 0.011392, aligning closely with its 3-month average, having fluctuated within a narrow range of 2.8%. The INR to EUR is currently at 0.009805, only 0.7% above its 3-month average, while it is trading at 60-day highs of 0.008549 against the GBP, reflecting a 1.1% increase from its average. Additionally, should the momentum continue, the INR to JPY has reached 90-day highs near 1.7386, which is 2.9% above its average.
Overall, while recent market developments suggest a temporarily improved outlook for the rupee, underlying economic tensions and external factors warrant cautious monitoring for anyone engaged in international transactions involving the INR.
