The Indian Rupee (INR) has recently experienced significant pressure, reaching a record low of 88.36 per U.S. dollar on September 5, 2025. This decline has been fueled by concerns regarding the potential imposition of new U.S. tariffs on Indian goods, particularly following a 50% tariff on key exports announced on August 27, 2025. Additionally, a substantial outflow of foreign portfolio investment, with $1.4 billion withdrawn in September alone, has added to the rupee's weakness.
In response to the falling rupee, the Reserve Bank of India (RBI) intervened in the currency market, selling U.S. dollars through state-run banks to limit further depreciation. Analysts suggest that while these interventions may stabilize the situation temporarily, ongoing geopolitical tensions and economic policies could pose continuous threats to the INR's value.
Recent forecasts from a Reuters poll conducted at the beginning of September indicate a consensus that the INR may stabilize and not decline significantly in the near term. Predictions suggest the rupee could stabilize around 88.04 by the end of September and hover near 88.00 within the next year.
From a technical perspective, the INR is trading at 90-day lows against major currencies. The exchange rate against the USD stands at approximately 0.011329, which is 1.6% lower than its 3-month average. Similarly, against the Euro and GBP, the INR is at lows of 0.009654 and 0.008346, respectively, both below their 3-month averages by 2.2% and 2.1%. The performance against the Japanese yen has also seen a decline, with the INR trading at 1.6675, 1.3% under its average.
Overall, while current market dynamics suggest immediate challenges for the INR, there are indications from analysts that the currency may avoid further major declines in the near term, provided geopolitical tensions and foreign investment flows stabilize.
