FX.co ★ Indian Rupee Struggles at Record Lows

The Indian rupee remains near its record lows of 89.5 per USD, as ongoing demand for the dollar from importers overshadows the positive effects of stronger-than-anticipated GDP figures. India experienced its most rapid economic growth in six quarters, with GDP for the September quarter soaring by 8.2%, surpassing the forecast of 7.3%. Despite this impressive growth, the rupee continues to be constrained due to trade imbalances, foreign capital outflows, and sporadic dollar sales by state banks as significant forward positions reach maturity. The currency has been under pressure since the imposition of significant US tariffs on Indian exports in late August, compounded by stalled trade negotiations between the US and India. On the economic policy side, the majority of economists anticipate the Reserve Bank of India will lower its benchmark interest rate by 25 basis points on December 5 and maintain it at that level through 2026, following previous cuts totaling 100 basis points this year. Nevertheless, the robust GDP figures have led some analysts to speculate that the RBI may opt to keep rates steady, which could lend support to the rupee.