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On February 10, 2025, the Indian rupee touched a historic low of 87.9563 against the US dollar. (almost 87 per Dollar) The reason? A new tariff plan rolled out by US President Donald Trump. This sudden policy shift triggered panic in the forex market, leading to sharp depreciation.
RBI Intervenes to Strengthen the Rupee
The Reserve Bank of India (RBI) didn’t sit idle. Heavy intervention from the central bank helped the rupee bounce back, marking its biggest one-day gain since March 2023. By February 11, the rupee had not only recovered but closed 0.7% higher at 86.8275 against the dollar.
Anindya Banerjee, a currency strategist at Kotak Securities, confirmed:
“The RBI has been heavily intervening since yesterday morning to support the rupee.”
Role of PM Modi’s US Visit
The timing of this recovery is crucial, as Prime Minister Narendra Modi is set to visit the US on February 12-13. The meeting aims to strengthen India-US ties in technology, trade, defense, energy, and supply chain.
Reports suggest that India has been proactively adjusting its tariff policies and negotiating on immigration matters to ensure favorable trade agreements. The government’s strategic moves indicate a long-term vision to position India as a global manufacturing hub amid the US-China trade war
What Does This Mean for India’s Economy
This sharp rupee recovery highlights RBI’s commitment to maintaining stability in volatile market conditions. However, future fluctuations will depend on:
US-India trade discussions during Modi’s visit
Global economic shifts triggered by Trump’s policies
India’s response to changing global tariff structures
While the rupee’s rebound is encouraging, the long-term battle for currency stability is far from over.
The key question remains- Can India sustain this recovery amid global economic uncertainty?
