The Reserve Bank of India (RBI) likely stepped in to stabilize the rupee on Wednesday, as the currency neared its all-time low amid strong dollar demand in the interbank market, according to traders.
Rupee Nears Record Low
The rupee traded at 87.2175 to the US dollar as of 12:15 PM IST, marking a 0.2% drop for the day and approaching its record low of 87.28, which was reached on Monday.
RBI’s Possible Dollar Sale
State-run banks were seen selling dollars near the 87.24-87.26 levels, likely acting on behalf of the RBI, traders said. This move helped reduce the pressure on the rupee and prevent further depreciation.
Factors Affecting the Rupee
The decline in the rupee is attributed to:
- Expectations of an interest rate cut during the RBI’s upcoming policy meeting on Friday.
- High dollar demand from importers in the market.
Despite the intervention, the rupee has weakened by over 1.5% in 2025, making it the worst-performing currency among major Asian economies.
Global Currency Trends
The dollar index dropped by 0.2%, settling at 107.8, while most Asian currencies strengthened, offering a mixed trend in the regional forex market.
As the RBI continues its efforts to support the rupee, market participants are closely watching the central bank’s monetary policy decision for further guidance on the currency’s trajectory.
