On Friday, October 3, 2025, the Indian Rupee concluded trading at a provisional 88.78 against the U.S. dollar, marking a decline of 7 paise. This movement pushes the domestic currency closer to its historic low, driven by strong dollar demand from importers and sustained foreign fund outflows.
Foreign exchange professionals highlighted that the USD/INR pair is currently hovering around an all-time low. This persistent weakness is largely influenced by rising global trade tensions and a general atmosphere of economic uncertainty worldwide. Moreover, the continuous exit of foreign funds from the Indian market and concerns surrounding the recent hike in U.S. visa fees have collectively exerted downward pressure on the rupee.
During Friday’s interbank foreign exchange session, the rupee commenced trading at 88.68 against the U.S. dollar. It touched an intraday low of 88.85 before provisionally settling for the day at 88.78, indicating a 7 paise loss compared to its previous closing rate.
Notably, on Wednesday, the rupee had seen a slight recovery, gaining 9 paise to close at 88.71 against the U.S. dollar, after reaching its then all-time closing low. Thursday’s trading sessions for equity, forex, bullion, and commodity markets were suspended due to the public holidays of Gandhi Jayanti and Dussehra. The rupee had previously hit an all-time low of 88.80 against the U.S. dollar on September 30.
Anuj Choudhary, a Research Analyst specializing in Currency and Commodities at Mirae Asset ShareKhan, commented on the situation: “We anticipate the rupee to strengthen amidst a broader weakening of the U.S. dollar and a downtrend in global crude oil prices. However, demand for dollars from importers might limit any significant upward movement.” Mr. Choudhary also suggested that the U.S. dollar’s value could diminish due to a lack of forthcoming economic data from the U.S., compounded by the ongoing government shutdown. He projects the USDINR spot price to trade within a range of 88.40 to 89.
Globally, the dollar index, which measures the dollar’s performance against a basket of six major currencies, was observed trading at 97.78, down by 0.06%, a movement also influenced by the U.S. government shutdown. Meanwhile, Brent crude, a key international oil benchmark, saw an increase of 1.03%, trading at $64.77 per barrel in futures markets.
In the domestic equity markets, the Sensex advanced by 223.86 points, closing at 81,207.17, while the Nifty gained 57.95 points to finish at 24,894.25. Exchange data revealed that foreign institutional investors were net sellers, offloading equities worth ₹1,605.20 crore on Wednesday.
Simultaneously, the Reserve Bank of India (RBI) decided to maintain its key interest rates on Wednesday. This decision reflects a wait-and-watch approach, as the central bank seeks further clarity on the potential impact of U.S. tariffs and assesses the effects of previous rate cuts and recent tax reductions. RBI Governor Sanjay Malhotra, however, hinted at the possibility of future monetary easing to bolster the economy against any adverse effects stemming from U.S. tariffs.