Rupee Nears Record Lows | RBI Steps In to Defend the Indian Rupee Amid Global Pressure
The RBI intervenes in the forex market to prevent the Indian rupee from breaching record lows amid global dollar strength and trade headwinds.
TheInterviewTimes.com | New Delhi | November3, 2025 — The Reserve Bank of India (RBI) has once again stepped into the foreign exchange market as the rupee nears record lows against the US dollar. The intervention comes amid growing global financial pressures, heightened volatility, and mounting concerns among importers and exporters about further currency depreciation.
Rupee Nears Record Lows: Market at a Tipping Point
On Monday, the rupee hovered near its all-time low of 88.80 per US dollar, closing at 88.76—a level last touched in late September 2025. Traders confirmed that several state-run banks were selling US dollars on behalf of the RBI, signaling an active defense to prevent a breach of the historical low.
Although the central bank has not issued an official statement, the pattern of dollar sales strongly suggests intervention aimed at maintaining market stability.
Must Read: US HIRE Act: Raghuram Rajan Warns of Serious Threat to India’s $225 Billion Service Sector
RBI’s Defensive Strategy and Market Signals
Analysts noted that the RBI was focused on defending the 88.80 mark, considered a key technical and psychological threshold. Earlier in October, the central bank’s robust actions triggered the rupee’s sharpest single-day rally in four months.
To curb the rupee’s decline, the RBI utilized both the spot and non-deliverable forward (NDF) markets, reportedly selling between $3–5 billion during periods of heightened volatility.
The RBI’s forward book, which tracks offshore derivative interventions, expanded by $6 billion in September—its first rise in seven months.
Why the Rupee Is Under Pressure
Several factors have combined to push the rupee near record lows:
- Stronger US Dollar: The greenback strengthened as the Federal Reserve signaled caution on interest-rate cuts, boosting the dollar index to a three-month high.
- Importers Hedging: Indian importers increased dollar demand to hedge costs, while exporters delayed bringing earnings home, expecting a weaker rupee.
- External Headwinds: New US tariffs on Indian goods, tighter visa policies, and persistent foreign portfolio investor (FPI) outflows have deepened the rupee’s slide.
India’s Forex Reserves: A Strong Buffer
Despite global headwinds, India’s foreign exchange reserves remain strong—hovering around $695–$700 billion as of late October 2025.
While weekly data showed a $6.93 billion dip due to active intervention, the reserves still provide the RBI with a significant macroeconomic buffer to prevent disorderly currency movements without draining domestic liquidity.
Must Read: Gender Equality in Indian Sports | India’s Women’s World Cup 2025 Victory and the Fight for Fair Pay
Market Outlook: RBI’s Balancing Act
Currency strategists expect the RBI to continue managing volatility, not to defend a fixed rate but to ensure stability and prevent panic selling. The 89-per-dollar level is now seen as the next critical psychological line.
The rupee has depreciated about 3.6% in 2025, underperforming most Asian peers that have posted modest gains. However, India’s economic fundamentals—including steady GDP growth, moderate inflation, and a manageable current account deficit—remain intact.
Global and Domestic Implications
The current episode underscores the delicate balance the RBI must maintain between currency stability and broader monetary policy goals. As global risks persist, including geopolitical tensions and uncertain US monetary policy, both traders and policymakers remain alert to potential turbulence.
Must Read: IBM-AICTE AI Lab Launched to Strengthen AI Education and Innovation in India
Conclusion
As the rupee nears record lows, the RBI’s intervention highlights its commitment to maintaining confidence in India’s currency and financial markets. With strong reserves and a proactive approach, the central bank continues to demonstrate its capacity to defend the rupee amid evolving global challenges.