The Indian Rupee (INR) has witnessed notable fluctuations recently, influenced significantly by the Reserve Bank of India's (RBI) market interventions and ongoing trade tensions with the U.S. On October 15, 2025, the RBI intervened in the foreign exchange market, selling between $3 billion to $5 billion to stabilize the rupee, which resulted in the currency experiencing its largest single-day gain in four months. This swift action has improved market sentiment, with demand for rupee call options up sharply, evidenced by the 1-month 25-delta risk-reversal for the USD/INR pair dropping to -0.8, the lowest it has been since 2012.
Compounding these developments are the recent tariffs imposed by the U.S. on Indian goods, which include an exceptional 50% tariff effective August 2025. Analysts have criticized these tariffs as a catalyst for rising trade tensions that may further complicate the INR's path. The broader economic backdrop of a strong U.S. dollar, driven by higher yields and ongoing Federal Reserve policy maneuvers, continues to exert downward pressure on the INR.
Looking at the recent price data, the INR has exhibited relative stability against major currencies. The USD/INR exchange rate stands at 0.011278, only 0.6% below its three-month average, showing consistent trading within a narrow range. On the other hand, against the Euro, the INR trades at 0.009748, slightly above its three-month average, while the GBP/INR rate of 0.008571 reflects a stronger position, standing 1.4% above its average. The rupee's strength against the yen is even more pronounced, trading at 1.7317, which is 2.1% above the three-month average.
Overall, while recent RBI interventions have provided temporary relief and a flicker of bullish sentiment, analysts suggest that ongoing trade issues and global economic conditions will continue to define the currency’s trajectory in the coming weeks. Businesses and individuals are advised to remain vigilant and consider these dynamics when planning international transactions.
