Why experts caution that there could be more pain ahead for the rupee
The Indian rupee has seen high volatility, falling below 95 against the US dollar for the first time on March 30, and is expected to remain weak due to global economic headwinds. The Reserve Bank of India has intervened in the foreign exchange market to stabilise the rupee, with its short-forward book standing at $77.7 billion at the end of February.
The Indian rupee has experienced significant volatility over the past year, falling 5.8% against the US dollar from January 1 to March 30. The currency recovered slightly after the US and Iran declared a two-week truce and the Reserve Bank of India (RBI) announced steps to curb speculation in the forex market. However, it weakened again after the US and Iran failed to reach a peace deal and oil prices spiked. The rupee's fall is attributed to heightened global economic volatility, with foreign portfolio investors (FPIs) pulling out close to Rs 1.81 lakh crore from India's equity market between April 2025 and March 2026. The RBI has intervened in the foreign exchange market, net selling $18.3 billion of spot forex reserves between March 1 and 27. India's forex reserves rose over $9 billion to $697.12 billion in the week ended April 3, with RBI Governor Sanjay Malhotra stating that the reserves are 'adequate'. The RBI has also directed authorised dealers to maintain their net open rupee positions within $100 million at the end of each business day.
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