During early trade, the rupee touched 91.075 against the dollar, extending its losing streak. It had already weakened past its previous record of 90.83 earlier in the session. Over the last 10 trading days, the rupee has slid from the 90 level to 91, losing nearly one percent in just five sessions.

Market experts attribute the decline to continuous selling by foreign institutional investors. Heavy demand for dollars and weak risk sentiment have further strained the domestic currency. Traders say the rupee remains trapped in a negative cycle driven by capital outflows.

The pressure intensified after the rupee closed at 90.78 in the previous session, marking another record low. Last Friday, the currency had already dropped 17 paise to end at 90.49, signalling sustained weakness.

Typically, the Reserve Bank of India steps in by selling dollars to smooth sharp volatility. However, persistent global headwinds continue to challenge stability. Analysts warn that unless capital flows improve, the rupee may remain under pressure in the near term, raising concerns for import costs and inflation.

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The RBI began easing rates last year, reducing the repo rate by 100 bps to 5.5% before pausing in August. Some economists argue the pause may continue due to strong growth supported by fiscal consolidation and reforms. Others say subdued inflation offers room for a 25 bps cut.

Reports from HDFC Bank and Crisil highlight that inflation undershooting and stable growth could justify another cut. SBI Research says the RBI must clarify the rate trajectory while maintaining a neutral stance. However, experts from Bank of Baroda and ICRA expect no change, citing forward-looking inflation trends staying near 4%.

Guidance is expected to be neutral or slightly dovish, with liquidity assurances.

The post RBI Monetary Policy This Friday: Will It Be a Rate Cut or Status Quo Amid Strong GDP & Record-Low Inflation? appeared first on India Podcast.

Moody’s highlighted that despite the rupee hitting record lows against the US dollar, most rated Indian companies have managed currency risks effectively through hedging and robust financial buffers. Investment-grade firms also continue to access overseas capital markets without difficulty.

“India will lead growth among emerging markets and across the region,” the agency said, noting that Asia-Pacific GDP is expected to grow 3.6% in 2025 and 3.4% in 2026. Emerging markets in the region will expand at an average 5.6%, far outpacing the 1.3% projected for advanced economies.

Moody’s said India’s expanding economic base, stable corporate performance, and strong investment momentum will keep it ahead of regional peers through 2026.

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