Rupee sees worst fall in 2 weeks to close at 87.34 against US dollar

The rupee fell the most in two weeks, weakening by 0.52 per cent against the dollar on Monday due to strong demand for dollars in the non-deliverable forward (NDF) market.

 

The Indian unit closed at 87.34 per US dollar, compared to the previous close of 86.88. Dealers said intervention by the Reserve Bank of India (RBI) helped cut losses intraday, though the rupee weakened again during the closing hours.

 

“There are NDF maturities of around $3-4 billion this week, causing persistent dollar demand. However, there was RBI presence in the morning around the 30-35 levels. But, towards the evening, they didn’t intervene, which is why the rupee ended lower,” said a dealer at a private bank.

 

The Indian unit was the worst-performing Asian currency on Monday. The rupee has depreciated by 4.5 per cent in the current financial year (2024-25). In 2025, it fell by 1.97 per cent against the dollar.

 

As of the end of December, the central bank had a short position of $67.9 billion. 

 

“The NDF market was quoting higher due to better arbitrage opportunities, and there was buying interest. However, there was also RBI intervention at around the 87.3-87.35 levels through state-owned and foreign banks. They are likely to have sold around $500 million,” said the head of treasury at a state-owned bank.

 

The dollar index was down 0.13 per cent to 103.7, a near four-month low, after US employment data showed slightly slower job growth and a slight rise in unemployment amid broader geopolitical uncertainty.

 

“A 0.2 per cent drop in the offshore yuan, driven by deflation concerns in China, has also weighed on other Asian currencies. Due to its high import tariffs, India faces a higher risk of reciprocal US tariffs in April, adding to the rupee’s downside risk. Moreover, foreign institutional investor outflows continue to curb any noteworthy appreciation,” said Abhishek Goenka, founder and chief executive officer of IFA Global.

 

However, dealers said that the US payroll data has not put pressure on the rupee because the RBI’s forward book is considerably short, and it is giving the market a hint that there is not much space for rupee appreciation, which is leading to a weakening of the currency.

 

“Unless real flows are coming into the market, the room for rupee appreciation seems quite limited,” a private bank dealer said.