MUMBAI: The Indian rupee slid to a record low on Monday, pressured by maturing non-deliverable forward positions alongside a persistent bearish pall on the currency as India remains the among the few major economies without a trade deal with U.S.
The rupee hit a low of 89.7575 during the session before closing at 89.5475, down 0.1% on the day.
Weakness in trade and investment flows has kept the rupee under pressure this year despite India’s status as the fastest growing major economy in the world, which has helped local stock indexes rise to record highs in recent sessions.
Traders said that maturity of large positions in the NDF market hurt the rupee on Monday. However, dollar-selling intervention by the central bank helped the currency hold above the psychologically important 90 level, they added.
Data released post market hours on Friday had shown that the Reserve Bank of India’s short forward dollar positions grew to $63.6 billion in October, underlining its heightened efforts to counter pressure on the rupee.
Indian central bank likely steps in to support Indian rupee as it sinks to record low
“Goods export growth is already slowing, and if high tariffs remain, risk to India’s growth, current account, and balance of payments will worsen, likely warranting a further weakening of the rupee,” ANZ said in a note.
The firm expects the local currency to weaken to 91.30 by the end of 2026, assuming a status quo on the up to 50% tariffs levied on Indian exports. A trade deal that lowers tariffs to 15-20%, meanwhile, could spark a rally to 88-88.50 but the RBI may counter the strength to replenish FX reserves, the note said.
India’s foreign exchange reserves stood at $688.1 billion as of November 21, per central bank data.
Weakness in the rupee on Monday also pushed it to an all-time low of 12.69 against the offshore Chinese yuan. The dollar index was down slightly while Asian currencies were mixed.
American Dollar Exchange Rate