Rupee Tumbles Amid Global Trade Tensions: RBI Steps In

The Indian rupee has hit a record low of 87.29 against the US dollar, amid significant foreign fund outflows and global trade war fears triggered by new US tariffs. The Reserve Bank of India is managing the associated volatility, while forex reserves have seen fluctuations due to market pressures.

The rupee's depreciation to 87.29 per dollar marks a troubling milestone amidst global financial challenges and trade tensions, officials indicated on Monday. Despite the record low, Finance Secretary Tuhin Kanta Pandey assured that the Reserve Bank of India is adeptly managing the currency's fluctuations.

Pandey emphasized that the rupee operates freely, without fixed rate constraints, and is facing pressures primarily due to consistent foreign fund outflows. These outflows exacerbate volatility as foreign institutional investors retract significant capital from domestic markets.

The decline of the rupee is further pressured by the wider strength of the dollar, propelled by increased demand from oil importers. Meanwhile, India's forex reserves experienced some fluctuations, rising by USD 5.574 billion, suggesting interventions aimed at stabilizing the currency's performance.

(With inputs from agencies.)