On Tuesday, February 11, 2025, the Indian rupee strengthened against the US dollar, appreciating to as high as 86.69 in early trading before settling at 86.89 by 11:15 a.m. IST. This marked a 0.7% increase from its previous close of 87.4750.
The Reserve Bank of India's (RBI) strategic interventions played a pivotal role in this appreciation. The central bank sold dollars through state-run banks, effectively managing liquidity and influencing the USD/INR exchange rate.
The dollar index remained steady at 108.3, while other Asian currencies experienced minor declines amid concerns of a trade war following U.S. President Donald Trump's imposition of 25% tariffs on steel and aluminum imports.
Persistent foreign capital outflows from domestic stocks and the RBI's policy easing have contributed to a more than 1% decline in the rupee's value in 2025. Analysts from Kotak Mahindra Bank highlighted that ongoing global uncertainties are expected to keep pressure on the rupee.
Despite these challenges, the RBI's proactive measures have provided temporary relief to the rupee. However, the currency remains vulnerable to global economic dynamics, including trade tensions and capital flows.
The RBI's interventions underscore its commitment to stabilizing the rupee and mitigating excessive volatility. Market participants are advised to monitor these developments closely, as the rupee's performance is influenced by a complex interplay of domestic policies and international economic conditions.
