The Indian Rupee (INR) has recently faced significant challenges, hitting a record low of 88.36 per U.S. dollar on September 5, 2025. This decline has been driven by a combination of factors, including the imposition of a 50% tariff by the U.S. on key Indian exports, which was enacted on August 27, and the resultant concerns over U.S.-India trade relations. Furthermore, foreign portfolio outflows have intensified, with investors withdrawing around $1.4 billion from Indian equities in September alone, contributing to total outflows exceeding $16 billion this year.
In response to the rupee's depreciation, the Reserve Bank of India (RBI) intervened in the currency markets by selling dollars via state-run banks to stabilize the INR around the 88.30 mark. Analysts remain cautiously optimistic, as a recent Reuters poll from early September suggests that while the rupee is under pressure, further major declines may be averted in the near term. The forecasts indicate a potential recovery to around 88.04 by the end of September and stabilization near 88.00 over the next year.
Recent trading data shows the INR is at notable lows against several currencies. Against the U.S. dollar, the INR is currently at 0.011348, which is 1.3% below its three-month average of 0.011501. The INR has traded within a narrow range of 0.011328 to 0.011708 recently. Similarly, against the Euro, the INR is at 90-day lows near 0.009645, approximately 2.2% lower than its three-month average of 0.009858. The performance against the British pound also reflects similar weakness, with an exchange rate of 0.008342, 2.1% below its average, and consistent trading within a stable range. The INR to Japanese yen shows a minor decline as well, currently at 1.6728, which is 1.0% less than its three-month average.
Overall, external pressures, particularly trade relations and investor sentiment, are crucial in determining the medium-term trajectory of the INR. As market conditions evolve, close monitoring will be essential for businesses and individuals engaged in international transactions.
