The Indian rupee traded within a narrow range and closed lower by 7 paise at an all-time closing low of 88.79 against the US dollar on Monday, primarily driven by persistent foreign capital outflows and heightened risk-off sentiments among investors.
Forex traders noted that the rupee remains under pressure near its historical low as market participants expressed concerns regarding global trade uncertainties, particularly the influence of the increasing US visa fees on India’s IT services export sector.
The outcome of the Reserve Bank of India (RBI) policy meeting scheduled for October 1 is anticipated to have a significant effect on the rupee’s performance and government bond prices. At the interbank foreign exchange market, the rupee opened at 88.69 against the dollar and settled down by 7 paise at 88.79 (provisional), marking its lowest-ever closing to date. The prior trading session saw the rupee rebound to close 4 paise higher at 88.72 following a record low of 88.76 against the dollar.
Anuj Choudhary, Research Analyst for Currency and Commodities at Mirae Asset ShareKhan, commented that the rupee is expected to face ongoing weakness due to sluggish domestic markets and high crude oil prices. Additionally, month-end dollar demand from importers could further exert pressure on the rupee. However, he suggested that potential weakness in the US dollar and any intervention by the RBI could offer support to the rupee at lower levels.
Choudhary added that traders will be monitoring US core pending home sales data and President Donald Trump’s speech for additional market cues. The RBI’s Monetary Policy Committee began its three-day meeting amid expectations for maintaining the key interest rate, although some analysts predict a possible 25 basis points reduction.
The committee’s decision, led by RBI Governor Sanjay Malhotra, is set to be announced on Wednesday, coinciding with ongoing geopolitical tensions and a recent US decision to impose a 50 percent tariff on Indian exports.
The dollar index, which measures the strength of the US dollar against a basket of six currencies, stood at 97.96, decreasing by 0.19 percent. In the crude oil market, Brent crude was trading 1.37 percent lower at USD 69.17 per barrel in futures trading.
On the domestic equity market, the Sensex declined by 61.52 points to close at 80,364.94, while the Nifty fell by 19.80 points to settle at 24,634.90. Data from exchanges indicated that Foreign Institutional Investors sold equities worth ₹5,687.58 crore on Friday.
Additionally, the US announced the implementation of a 100 percent tariff on branded or patented drugs entering the country from October 1, exempting pharmaceutical companies that are currently establishing manufacturing plants in the US. This exemption applies to projects where construction has already commenced, including sites that have broken ground or are underway.
In forex reserve news, India’s reserves decreased by $396 million to $702.57 billion for the week ending September 19, according to RBI data. This follow-up comes after the previous week’s increase of $4.698 billion, which brought the total to $702.966 billion.
Published on September 29, 2025.
