The rupee all time low remains in sight but unbroken. On Friday, October 9, the Indian currency closed around 96.71–96.73 against the US dollar — a small recovery, not a new record — after touching an intraday high of 96.51 in the afternoon on heavy Reserve Bank intervention through state-owned banks selling dollars. The all-time intraday low stands at 96.96 (May 2026) and the record closing low at 96.82, but the rupee ended the week down 42 paise and is down more than 7% in calendar 2026, among Asia’s worst-performing currencies.
The pressure came from persistent corporate and importer dollar demand — companies were seen covering positions and buying dollars at lower levels — while foreign investors kept selling. FPIs have pulled a record ~$24.7 billion from Indian equities in 2026 so far; in the week ended October 9, foreign institutions net sold ₹30,294 crore of shares. Brent crude spiked about 4% intraday on Thursday to ~$106 before easing, and the US 10-year Treasury yield hit 5.34% last week, its highest since 2002, keeping the dollar bid. For context on the corporate earnings week, read our TCS Q2 results coverage.
Rupee All Time Low Fight: RBI’s Dollar Window and Derivative Curbs
On Saturday, October 10, the RBI announced a package to defend the currency. State-run oil companies IOC, HPCL and BPCL get a special dollar window effective October 12 for daily dollar needs direct from the central bank instead of the spot market — removing one of the largest sources of FX demand, though analysts say reserves will still deplete. The RBI also cut exchange-traded currency-derivative position limits from $100 million to $5 million, banned rebooking of cancelled rupee derivatives, and imposed a 20% foreign-exchange risk reserve on large forex derivative deals.
The moves follow the RBI’s first rate hike in nearly four years — the repo rate rose 25 basis points to 5.50% on October 7 — and weeks of spot intervention that have drained roughly $46–50 billion from forex reserves since mid-September to about $734 billion.
RBI Governor Sanjay Malhotra said this week the rupee is “undervalued” in real effective terms and the central bank will ensure it finds its “correct value.” For the broader policy backdrop, see our GST 2.0 reforms explainer.
Equities Rebounded, But the 97 Line Is the Real Test
Markets got Friday relief: the Sensex jumped 879 points to 72,472 and the Nifty rose 289 points to 22,520, snapping an eight-week losing streak — after Thursday’s crash wiped over ₹10 lakh crore in market value. But analysts stay cautious: a bank currency trader told Reuters it is “only a matter of time before the rupee breaks 97, and possibly falls a lot further,” MUFG forecasts 97.50 by September 2027, and a Reuters poll expects the rupee to languish near record lows for 3–6 months. With India importing roughly 80% of its crude, a slide past 97 would raise import bills and inflation pressure — and intensify corporate dollar-buying and speculative shorts. Source: Reuters and Reuters.
Frequently Asked Questions
What did the RBI announce on October 10?
A special dollar window for IOC, HPCL and BPCL effective October 12; currency-derivative position limits cut from $100 million to $5 million; a ban on rebooking cancelled rupee derivatives; and a 20% foreign-exchange risk reserve on large forex derivative deals.
Why is the rupee falling?
Persistent corporate and importer dollar demand, record foreign investor selling (~$24.7 billion from equities in 2026), elevated crude prices and high US bond yields keeping the dollar strong.
How does a weak rupee affect ordinary Indians?
A pricier dollar raises import bills — India imports about 80% of its crude — which can push up fuel prices and inflation, and makes foreign travel and education costlier.
What happens if the rupee crosses 97?
Analysts say breaching 97 would intensify corporate dollar-buying and speculative bets against the rupee; MUFG forecasts 97.50 by September 2027, and the RBI is expected to keep defending the 97 line.
