The Indian rupee closed at 88.78 against the US dollar today, October 3, 2025, down marginally on the week but steady just above its all-time low of 88.80, hit on Tuesday.
The rupee has been weakening due to the US-India trade frictions and portfolio outflows, with foreign investors net selling over USD 2.5 billion of local stocks in September.
Analysts suggest the Indian rupee is expected to remain volatile this week due to various factors such as global financial market volatility, geopolitical tensions and the upcoming US non-farm employment data.
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“We expect the dollar index to remain volatile this week amid volatility in the global financial markets, geopolitical tensions and ahead of the US non-farm employment data. The rupee could trade in the range of 95.85-99.40 this week”, Manoj Kumar Jain, Director Prithvi Finmart said.
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Why is the rupee under pressure?
The rupee has been struggling due to the US President Donald Trump’s executive order of imposing a heavy fee on new H1B visas and 100 per cent trade tariffs on branded pharmaceutical products.
Moreover, heavy sell-offs in the domestic equity markets by Foreign Portfolio Investors (FPIs) further weakened the rupee’s position.
The dollar index inched up on Friday after extending its fall amid mixed US macroeconomic data and government shutdown fears.
Market sentiment:
The Reserve Bank of India (RBI) is expected to intervene to prevent the rupee from declining to new lows. Market sentiment remains weak, as traders predict that the Central Bank will likely intervene to stabilise the currency.
Some forecasts predict the rupee to trade in the range of 85.5-87.5 per dollar in FY26, while others expect it to reach 90.00 per dollar by December 2025 due to global uncertainties and US trade policies.
The US trade deal updates, domestic equity market volatility and global financial market trends will play a significant role in determining the rupee’s direction. The RBI’s intervention strategy and geopolitical developments will also be crucial in shaping the Indian currency’s performance.
