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The rupee closed at 88.7175 against the U.S. dollar on Friday, little changed on the day but down 0.7% on the week, its steepest weekly fall since late August.
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Asian currencies are also trading down with Taiwanese Dollar down by 0.42 percent, Thai Baht down by 0.26 percent, Malaysian Ringgit down by 0.21 percent, and South Korean Won by 0.12 percent, according to the Bloomberg data.
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The Indian rupee fell 2% in July, its worst decline since September 2022
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Rupee has been under severe pressure amid external shocks from start of this financial year. INR has depreciated around 3.73 percent in FY26 so far
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The hike in fresh H-1B visa fee from next year has sparked worries over lower remittances, and potential equity outflows from India’s IT sector, which could be a double hit that the rupee could ill afford, at a time when foreign inflows have already been weak.
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Currency moves in the early Asia session were more subdued after a volatile ride last week following a raft of rate decisions including that of the Fed, the Bank of England and the Bank of Japan
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Trading in Asia was thinned with markets in Japan closed for a holiday, leaving currencies mostly rangebound in the early session
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As global reliance on the US dollar declines, India cautiously adapts—balancing local currency trade, reserve diversification, and strategic autonomy to strengthen its financial resilience in an emerging multipolar global economy
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Year-to-date, the rupee has lagged its Asian peers, weakening by about 2.85 percent in 2025.
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Some experts believe that rising concern over US central bank's independence may be undermining trust in dollar-denominated assets, pushing investors toward gold.
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A weaker rupee rate for exporters would be risky for the central bank, though. It could damage broader sentiment toward the currency, which, in turn, could force the central bank to step up intervention in the foreign exchange market, causing a rapid erosion of India’s reserves.
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The Indian rupee has depreciated around 0.7 percent in August, and on a year-to-date basis, it is weaker by 2.94 percent against the US dollar. August saw fourth month of weakness, which experts have attributed to tariff-related uncertainty.
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The Dollar index eased after the US Fed chair left the door open on future interest rate cuts, while adding that there are risks of both rising unemployment and stubbornly higher inflation.
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The currency is getting support from GST reforms announced by the Prime Minister Modi during his Independence Day address in a push for self-reliance amid uncertainty over India-US trade deal.
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The local currency unit gained 0.31% - its highest intraday gain since July 3 - and closed at 87.4400, compared to Tuesday's close of 87.7125.
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On August 6, Trump signed an executive order for imposing an additional 25 per cent tariff on imports from India.
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Firm intervention by the central bank on Friday helped the rupee find some footing, but traders and analysts expect a depreciation bias in the near term.
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The greenback was also on track for its first monthly gain for the year, bolstered by a hawkish Fed and U.S. economic resilience, with uncertainty over tariffs beginning to ease given recent trade deals struck by Washington.
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The CBDC isn’t a feature. It’s a new logic embedded in money. And when logic changes at the base layer, everything upstream — including value chains — changes with it.
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The local currency, which opened at 85.5837 against the US dollar, fell to 86.0038 against the US dollar during the afternoon trade
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The dollar index, which measures the US currency against six others, slipped to 96.688, its lowest since February 2022
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The latest headlines on Powell add another element of risk to the dollar and US Treasuries, which are both already under pressure from uncertainties around the impact of tariffs and a ballooning fiscal deficit.
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The Reserve Bank of India is likely to intervene if the rupee weakens further toward 87 per dollar, according to Australia & New Zealand Banking Group Ltd. and MUFG Bank Ltd. The Indian unit is the worst hit Asian currency this quarter, weighed by surging oil prices.
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Israel has begun carrying out strikes on Iran, two U.S. officials told Reuters, adding that there was no U.S. assistance or involvement in the operation. Another report suggested that explosions were heard northeast of Iran’s capital Tehran.
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The rupee has hovered in the 85.30 to 86.02 range against the U.S. dollar over June so far with its 1-month realised volatility declining to 4.5%, the lowest in about six weeks.
