The rupee on Monday breached the psychologically crucial 91 to the US Dollar for the second time in about a month, being weighed down by corporate dollar demand, continued outflows due to foreign portfolio investor (FPI) selling in the Indian equity markets, and uncertainty on the outcome of the tariff talks between India and the US.
However, the rupee pulled back, apparently on mild RBI intervention, from its intraday low of 91.01 to close at 90.9425 per USD, down about 7 paise from the previous close of 90.87.
Opening firm at 90.6950 per USD, the rupee hit intraday highs/lows of 90.63/91.01. The rupee had breached the 91 mark against the USD for the first time on December 16, 2025, when it touched an intraday low of 91.14.
Abhishek Goenka, Founder and CEO, IFA Global, observed that the Indian rupee extended its recent weakening bias on Monday, marking a fourth consecutive session of losses as flow-driven pressures continued to dominate price action.
Corporate dollar demand limits recovery
Despite a relatively firm opening aided by a brief pullback in the US dollar, USD/INR remained well-supported through the session as persistent corporate dollar demand and importer hedging activity resurfaced, preventing any sustained rupee recovery, he added.
Market dynamics
Dipti Chitale, CEO, Mecklar Financial Services, said the rupee opened marginally firmer and touched an intraday high of 90.63, but quickly gave up gains amid routine corporate dollar demand and limited dollar supply, possibly due to reduced liquidity on account of the US holiday. USD/INR has recorded a high of 91 during the session.
Geopolitical and trade risks
“Ongoing geopolitical uncertainties continue to weigh on the rupee. While there was no confirmation of direct RBI intervention in the spot market, market participants believe that state-owned banks may have supplied dollars around the 91 level to smooth volatility.
Outlook
“We expect the rupee to remain under pressure until geopolitical risks ease and/or greater clarity emerges on trade agreements. Importers are advised to cover exposures on any pullbacks in the near term,” Chitale said.