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Informist, Monday, Dec. 15, 2025

 

NEW DELHI – The recent fall in the Indian rupee against the US dollar was driven in part by tariff-related trade developments, Minister of State for Finance Pankaj Chaudhary said on Monday. The Indian currency had slid to record lows against the US dollar due to concerns about US tariffs and weak capital inflows.

 

Responding to a question in the Lok Sabha, Chaudhary said the rupee's depreciation during the current financial year has been driven by a widening trade deficit and prospects stemming from ongoing developments in India's trade agreement with the US, alongside relatively weak support from the capital account. The Indian unit touched a record low of 90.79 a dollar on Monday. 

 

The rupee's exchange rate, which is market-determined, is influenced by a range of factors, including movements in the dollar index, capital flows, interest rate differentials, crude oil prices and the current account deficit, the minister said. He reiterated that India does not target a specific exchange rate level or band, and that the Reserve Bank of India intervenes only to curb excessive volatility. 

 

To manage pressures on the currency, the RBI has taken several steps to boost foreign exchange inflows, including extending export credit repayment periods, easing norms for merchant trade, allowing greater use of Special Rupee Vostro Accounts for investments in government securities, and relaxing certain investment limits for foreign portfolio investors in corporate debt, he said. The government also shared details of RBI's foreign exchange market operations, showing net dollar sales across several months between October 2024 and September 2025 to smooth volatility in the rupee. 

 

While acknowledging concerns about the rupee's depreciation, the minister said a weaker currency can improve export competitiveness even as it raises import costs. He said India's macroeconomic fundamentals remain strong, supported by robust domestic demand, moderating inflation and fiscal discipline, and that the government continues to closely monitor exchange rate movements and their impact on the economy.  End

 

US$1 = INR 90.73

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Kabir Sharma

Edited by Saji George Titus

 

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