The Indian Rupee (INR) has been under significant pressure, primarily due to the ongoing influence of external and internal economic factors. Analysts have noted that the US Federal Reserve's continued high interest rates have attracted capital to the US, causing capital outflows from India. This shift has led to downward pressure on the INR, exacerbating its depreciation against the US dollar.
The widening trade deficit in India, resulting from increased imports alongside stagnant export growth, has further intensified demand for US dollars, compounding the challenges facing the rupee. Additionally, geopolitical tensions, particularly the current US–India trade crisis characterized by steep tariffs on Indian exports, have negatively impacted trade balances and investor sentiment.
Recent data highlights a stark increase in gold imports, with figures ballooning by 200% in October 2025, which has exacerbated the current account deficit and contributed to the rupee's decline. In response to these pressures, the Reserve Bank of India (RBI) has intervened in the forex market, selling US dollars from its reserves to stabilize the rupee, though this action has implications for India's foreign exchange reserves.
Recent trading patterns indicate the INR to USD exchange rate at 0.011138, which is only 0.8% below its three-month average of 0.01123 and has remained in a stable range of 3.6% between 0.010999 and 0.011398. Conversely, the INR to EUR stands at 0.009460, approximately 1.9% weaker than its three-month average of 0.009648, with trading range stability of about 5%. For the GBP, the INR is at 0.008250, down 2.3% from the average of 0.008443. Notably, the INR to JPY rate is slightly stronger at 1.7439, indicating a 0.9% increase from its three-month average.
As these challenges continue to evolve, market participants are advised to closely monitor the factors influencing the INR to navigate the complexities of international transactions more effectively.
