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Rupee hits record low as dollar demand persists

Market sources indicated that the Reserve Bank of India (RBI) intervened through state-run banks to curb the rupee’s losses.

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The rupee depreciated 45 paise to hit a record low of 87.95 against the US dollar in early trade on Monday. (Source: Pixabay)

The Indian rupee fell to an all-time low on Thursday, touching 87.55 against the dollar, surpassing its previous low from the day before. The drop is attributed to increased dollar demand, possibly linked to the non-deliverable forwards market.

The rupee fell 0.1% to 87.55, eclipsing its previous record low of 87.4875 hit on Wednesday.

Dollar sales by state-run banks though, most likely on behalf of the Reserve Bank of India, helped limit its losses, three traders told Reuters, including one directly familiar with the matter.

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The offers from state-run banks are “quite strong”, but the dollar buying pressure is persistent as well, one of the traders said.

The daily dollar-rupee reference rate was quoted at a premium of 0.50/0.60 paisa, signalling heightened demand for the greenback.

The rupee has been stuck in a dogged downtrend over the last few months amid a paucity of portfolio inflows, uncertainty of US President Donald Trump’s tariff policies and, more recently, expectations of rate cuts by the Reserve Bank of India.

The rupee has declined about 2% this year so far, and is the worst performer among Asian currencies