The Rupee closed 4 paise weaker on Monday at 88.76 as it was weighed down by foreign portfolio outflows from the equity markets amid risk-off sentiment, and demand for the greenback from corporates.
This closing was just off the record closing low of 88.7750 per US Dollar, hit on September 24th.
The Rupee opened a tad stronger at 88.69 against previous close of 88.72. However, it could not sustain the gains due to demand for Dollars from custodial banks and India Inc. Intraday, it hit a low of 88.81.
DMI Finance, in a report, said in the near term, the Rupee’s trajectory is expected to remain influenced mainly by US trade policy actions and the scale of the central bank’s interventions.
CareEdge Ratings, in a report, said: “We expect the Rupee to remain under pressure in the near term. However, the RBI is likely to intervene to limit currency volatility.
“We maintain our FY26-end forecast of 85–87 for USD/INR, supported by a soft dollar, a firm yuan, India’s manageable CAD and the prospects of a US–India trade deal.”
The agency expects India’s CAD (current account deficit) to be 0.9 per cent of GDP in FY26 (with US tariffs at 25 per cent).
However, if the 50 per cent tariff persists, CAD could widen slightly to 1.2–1.3 per cent of GDP but would remain manageable. The agency emphasised that forex reserves near a record high of $703 billion, providing the RBI ample room to intervene in the currency market if necessary.
Published on September 29, 2025
