Rupee Falls to ₹87.21 per Dollar: Reasons and RBI Role
Why in the news
The rupee slid sharply to ₹87.21 per dollar as offshore forward contracts expired and the RBI held back from intervening or rolling them over.
Key facts
- Fall: 50 paise (0.57%) to ₹87.21.
- Year-to-date: 4.31% lower in FY25 and 1.81% lower in 2025.
- RBI settled $5-6 billion of offshore forwards; about $2.6 billion was futures expiry, the rest in the NDF market.
- Traders said stop-loss orders deepened the drop because RBI seemed unwilling to roll the contracts over.
RBI’s role
| Item | Detail |
|---|---|
| Spot intervention, 10-11 February | Sold $12-14 billion, keeping the rupee stable for weeks |
| Latest move | Stayed away from intervening, letting the rupee weaken |
| Net short forward book | $67.9 billion (December 2024) |
| Estimate, end-January | $80-85 billion |
Other pressures
- Importers’ higher dollar demand and more hedging.
- The rupee was the worst performer among Asian peers on Tuesday; the Thai baht lost 0.60%.
- February depreciation reached 0.68%.
Outlook
- Near-term direction depends on RBI’s intervention approach and global sentiment.
Exam angle
- Terms: NDF market, forward book, hedging, spot intervention.
- Level: ₹87.21 per USD.
- Central bank: RBI manages volatility.