Rupee Stabilises After Recent Record Low

The Indian rupee ended slightly higher on Wednesday, recovering from recent volatility even as broader Asian currencies weakened. The local unit closed at 88.07 per US dollar, marking a modest 0.1% rise from the previous session, after hitting an intraday high of 87.99. Traders pointed to fading bearish sentiment in the options space, with the one-month USD/INR risk reversal flattening after briefly showing dollar calls at a premium last week. This reflects reduced demand for hedges against further rupee depreciation. The rupee had plunged to a record low of 88.33 earlier this week, surpassing its previous yearly high of 88.17 on August 31, 2025. Despite the drop, the move was described as orderly, with the Reserve Bank of India (RBI) seen smoothing volatility rather than forcefully intervening. From a broader perspective, the rupee has weakened 0.48% on the week, 0.95% this month, 2.77% this quarter, and 4.91% so far this year. The currency’s yearly low of 83.48 was hit on September 22, 2024, highlighting its sustained slide under trade pressure. The depreciation comes against the backdrop of US President Donald Trump’s steep 50% tariff on Indian exports, announced on August 27, which traders say has worsened foreign fund outflows. Analysts believe policymakers may tolerate gradual depreciation to support exporters, given India’s foreign exchange reserves of $690.72 billion.Disclaimer: PolyMart does not offer guarantees regarding the accuracy, reliability, or completeness of the information provided on its platform. Users are advised to independently verify any data before relying on it for decision-making purposes.