Rupee Hits Fresh Record Low At 91.81 As Dollar Strength Intensifies Pressure

The Indian rupee slipped to a new historic low of 91.81 against the US dollar on Friday, extending its decline as sustained demand for dollars from importers and corporate entities outweighed early gains in the session. The currency breached its previous record low of 91.74, falling about 0.2% during the day.

The rupee had opened on a relatively firmer note at 91.43, but selling pressure soon returned, pushing it deeper into negative territory. Bankers said the renewed weakness was triggered by importers purchasing dollars through private banks to meet near-term payment obligations, which shifted the balance back in favour of the greenback.

So far this year, the rupee has depreciated around 5.3% against the US dollar, placing it on course for its sharpest annual fall since 2022. Market participants noted that no visible intervention by the Reserve Bank of India was observed during the session, allowing pressure on the currency to persist.

Traders also pointed out that the RBI has been the main participant in managing premiums in the currency market. In its absence, premiums have tended to edge higher naturally, reflecting tight dollar liquidity and elevated demand.

Meanwhile, India’s central bank has reduced its holdings of US Treasury bonds to a five-year low as part of a broader strategy to support the rupee and diversify foreign exchange reserves. The value of these holdings has dropped to about $174 billion, nearly 26% lower than the 2023 peak, and now accounts for roughly one-third of the country’s forex reserves, compared with 40% a year earlier.

This shift is partly linked to efforts to stabilise the weakened rupee, which has come under pressure amid delays in an India–US trade agreement and higher tariffs imposed by Washington on Indian exports. By selling US Treasuries, the RBI can free up funds to buy rupees in the market, helping to shore up the local currency.