Recent developments have significantly impacted the Indian Rupee (INR), particularly following the Reserve Bank of India's (RBI) intervention in the foreign exchange market. On October 15, 2025, the RBI sold between $3 billion to $5 billion to stabilize the rupee, which had faced pressure from factors such as U.S. tariffs and rising gold imports. This decisive action resulted in the rupee achieving its largest single-day gain in four months, signaling a potential shift in its market trajectory.
Market sentiment has shown a notable change, with the options market tilting sharply in favor of the rupee. The recent trading indicated that the 1-month 25-delta risk-reversal for the USD/INR pair dropped to -0.8, a level not seen since 2012. This shift indicates a growing demand for rupee call options, suggesting increased bullish sentiment among investors.
The backdrop of U.S.-India trade relations continues to pose challenges for the INR. The U.S. imposed a significant 50% tariff on Indian exports in August 2025, exacerbating trade tensions and contributing to the rupee's struggles. These developments highlight the delicate interplay between trade policies and currency valuations, which analysts suggest will be crucial in the coming months.
Global economic conditions, particularly the U.S. Federal Reserve's monetary policy, also have a pronounced effect on the USD/INR exchange rate. The stronger U.S. dollar, underpinned by higher U.S. yields, has coalesced with domestic concerns to amplify the rupee's depreciation.
In terms of recent price data, the INR to USD is currently near 90-day lows at 0.011253, which is just 0.8% below its 3-month average. This currency pair has traded within a stable range of 2.1%, indicating relatively calm market conditions. Meanwhile, the INR to EUR is at a 14-day low of 0.009704, again slightly below its 3-month average, while the INR to GBP has demonstrated resilience, trading at 0.008556—1.2% above its average. Furthermore, the INR to JPY stands at 1.7333, showing a more robust position, being 2.5% above its 3-month average.
As the currency market continues to react to both domestic and international factors, monitoring these trends will be essential for individuals and businesses aiming to optimize their international transactions.
