The Indian rupee weakened to a fresh lifetime low on Friday, dragged down by fading expectations of a US Federal Reserve rate cut and persistent uncertainty over the US–India trade standoff.
The currency slipped past its earlier record of 88.80, a level the Reserve Bank of India had been actively defending in recent weeks.
The rupee touched 89.45 against the dollar in early trade, marking its weakest level ever. On the interbank order-matching system, the drop was steeper, with the currency last quoted near 89.34.
Sentiment around the rupee has been under pressure for weeks, with traders pointing to the fallout from steep U.S. tariffs on Indian exports imposed in late August. Foreign investors have pulled out nearly Rs 16.5 billion from domestic equities this year, making the rupee one of the weakest-performing major Asian currencies in 2024.
Market participants also said the RBI appeared to have eased its intervention on Friday. The central bank had previously stepped in around the 88.80 mark, but traders noted a noticeable absence of support this time, which accelerated the rupee’s slide once that level broke.
Importers added to the demand for dollars, while exporters stayed relatively inactive, further tilting pressure onto the currency. “Once 88.80 broke, volumes spiked sharply,” a trader at a private sector bank said, describing the move as a stop-loss–driven rush that swept through the market.
The outlook for the rupee remains uncertain as global risk sentiment stays fragile and investors wait for clearer signals from both the Fed and ongoing trade negotiations between Washington and New Delhi.
