The rupee hit an all-time low on Wednesday due to expectations of a Reserve Bank of India interest rate cut later in the week, as well as increased dollar demand from importers. The currency dropped to 87.35 against the U.S. dollar, surpassing its previous record low of 87.28 set on Monday, marking a nearly 0.3% decline for the day.
While most Asian currencies benefited from a weaker dollar on Wednesday, the rupee underperformed as traders anticipated the first RBI rate cut in almost five years. The dollar index was down 0.3% at 107.7.
The rupee faced additional pressure from importer dollar bids, although occasional dollar sales from state-run banks helped mitigate losses, according to traders. Alongside expectations for a rate cut, the currency has also been impacted by continued foreign portfolio outflows, with overseas investors selling $8 billion worth of local stocks and bonds in 2025 so far.
