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Rupee Struggles: Bankers Urge RBI Action Amid Crisis

12/26/2025

30 2 Full Breakdown

Summary

Story summary

Bankers urge the Reserve Bank of India to intervene as rupee forward premiums hit multi-year highs amid year-end dollar liquidity pressures.
The one-month dollar/rupee forward premium rose to 55 paisa, the highest in over six years.
The rupee trades around 89.7–89.8 per dollar, Asia's worst-performing currency.
Analysts warn the rupee could weaken further without a United States trade deal, while RBI dollar sales have not matched demand.

History

Historical Context

The Indian rupee faced significant depreciation in 2013, dropping to a record low of 68.85 per dollar due to stagnant reforms and declining foreign investment. In response, the Reserve Bank of India raised interest rates by 0.25% to combat inflation, which stood at 9.87%. This crisis reflects ongoing vulnerabilities in India's currency management and economic policy, exacerbated by global market uncertainties.

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Story summary

Bankers urge the Reserve Bank of India to intervene as rupee forward premiums hit multi-year highs amid year-end dollar liquidity pressures.
The one-month dollar/rupee forward premium rose to 55 paisa, the highest in over six years.
The rupee trades around 89.7–89.8 per dollar, Asia's worst-performing currency.
Analysts warn the rupee could weaken further without a United States trade deal, while RBI dollar sales have not matched demand.

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