Bankers and analysts expect the currency to keep drifting lower in the near term with interventions by the central bank keeping a lid on volatility. The rupee closed at 90.4150 per dollar, down 0.5% on the week. It fell to 90.55 in early trading but held above that level once the central bank stepped in to support the currency, traders said.
“Pressure on the currency has persisted since steep U.S. tariffs came into effect. We expect this to continue into 2026,” analysts at Standard Chartered said in a note, forecasting the rupee to weaken to 93 over the next 12 months.
The rupee is Asia’s worst-performing currency this year, down more than 5% against the dollar.
However, despite this week’s slide, near-tenor volatility stayed contained, with one-month implied volatility at 4.2%, only slightly above its 2025 average. Indian Prime Minister Narendra Modi said he spoke with U.S. President Donald Trump by phone on Thursday, as New Delhi seeks relief from up to 50% U.S. tariffs on some of the country’s key exports.
Trade negotiations collapsed in late July, after India resisted opening its market for U.S. farm products. Talks have resumed since then with a U.S. trade delegation visiting the country earlier this week.
Most Asian currencies rose on Friday, with the Chinese yuan hitting a 14-month high even as the People’s Bank of China signalled unease over its rapid gains.
The divergence has pushed the rupee down about 8% against the yuan this year. It hit a record low versus the Chinese currency on Friday.
