Reserve Bank of India Intervenes as Rupee Hits Record Low

The Indian rupee hit a historic low of 89.66 against the US dollar on November 21, 2025, driven by a record $41.7 billion merchandise trade deficit in October and global risk aversion. The currency further declined due to foreign investor outflows from Indian equities and uncertainty surrounding a US-India trade deal.

To prevent the currency from breaching the psychological 90-per-dollar mark, the Reserve Bank of India intervened aggressively on November 24. The central bank sold dollars via the interbank order-matching platform and non-deliverable forward markets, causing the rupee to rebound and open at approximately 89.15. Despite this recovery, the rupee closed slightly lower at 89.22 on November 25.

Governor Sanjay Malhotra linked the currency's weakness to increased dollar demand and suggested that a finalized trade agreement with the United States would alleviate pressure. While US President Donald Trump stated he would reduce tariffs on Indian imports eventually, the lack of a formal deal continues to weigh on market sentiment. Meanwhile, potential December rate cuts from the US Federal Reserve and India's projected 7.3% GDP growth for the July-September quarter are providing contrasting influences on the exchange rate.