The Indian rupee might have tumbled to the 90-mark towards the US greenback, nevertheless it’s managing to carry its floor extra firmly than a lot of its rising market counterparts, the federal government sources stated on Friday.
They stated that regardless of going through international challenges, together with a stronger US greenback following the US Federal Reserve’s choice to chop the Federal Funds Charge, the rupee has outperformed different currencies such because the Euro, Japanese yen, and the Korean gained this 12 months.
Citing the Reserve Financial institution of India’s newest evaluation, officers stated the slide in October was as a result of a stronger greenback after the US Federal Reserve introduced its choice to decrease the Federal Funds Charge.
In accordance with the RBI’s November bulletin, “the depreciation of the rupee in October was as a result of a stronger greenback following the US Fed’s coverage announcement to decrease the Federal funds price.”
Sources stated the rupee’s relative stability is supported by India’s broader fundamentals – “secure inflation, a resilient progress outlook for the Indian financial system, a narrower present account deficit, regular companies exports, sturdy personal remittances, and sturdy overseas change reserves.”
They added that the rupee’s motion from April to November 2025 has been in step with that of different currencies such because the Japanese Yen and the Korean Received. For the interval from April to November 2025, the Indian rupee’s depreciation stands at -4.1%, performing higher than the Euro (-6.7%), Japanese yen (-3.5%), and Australian greenback (-3.4%).
Officers reiterated the central financial institution’s stance that the worth of the INR is market-determined, with no goal or particular degree or band. They stated the change price continues to replicate a mixture of international and home components – the Greenback Index, capital circulate tendencies, rate of interest cycles, crude costs, and the present account place.
In accordance with authorities sources, the RBI screens key developments throughout the globe that will have an effect on the USD-INR change price. This contains financial coverage actions, main information releases, OPEC+ selections, geopolitical occasions, and actions in G-10 and rising market currencies. The central financial institution’s interventions, they stated, are aimed solely at guaranteeing orderly market functioning and “to curb undue volatility within the INR.”
Steps taken by the RBI
Sources highlighted measures taken lately to diversify overseas change inflows. These embrace:
From January 2025, individuals resident exterior India with enterprise pursuits within the nation have been allowed to open a Particular Non-Resident Rupee Account (SNRR) “for the aim of placing by means of permissible present and capital account transactions with an individual resident in India… and for placing by means of any transaction with an individual resident exterior India.”
Switch of funds for all bona fide transactions between repatriable rupee accounts was permitted in January 2025.
On December 6, 2024, the RBI raised the ceiling price for FCNR(B) deposits, permitting banks to supply increased rates of interest on deposits mobilised until March 31, 2025.
An operational framework launched in November 2024 allowed FPIs breaching the ten% restrict to divest or reclassify their holdings as FDI.
In Might 2024, authorised sellers have been permitted to permit non-residents to open and preserve interest-bearing rupee or overseas foreign money accounts “for the aim of posting and gathering margin in India” for permitted spinoff contracts.
Push for rupee-based commerce
The October 2025 MPC assembly launched additional measures to increase the worldwide use of the rupee. Authorised vendor banks can now lend in rupee to non-residents in Bhutan, Nepal, and Sri Lanka for commerce transactions.
Choose currencies of India’s buying and selling companions printed by FBIL can be included to allow clear reference change charges for rupee.
The permitted makes use of of Particular Rupee Vostro Account balances will now embrace funding in authorities securities, company bonds, and business papers – a transfer officers say is designed to deepen rupee-based settlement methods.
Sources stated these steps are geared toward bettering entry to rupee-denominated transactions whereas strengthening resilience towards international spillovers, even because the foreign money stays underneath stress within the close to time period.
The rupee on Friday gave up preliminary positive aspects and settled at 89.95 towards the US greenback.
