Rupee Weakness Tests RBI Against Trade Shock

India’s currency markets were roiled today as the rupee slid to ₹86.23 per dollar—a near four‑month low—amid market anxiety over looming U.S. tariffs and sustained foreign outflows. Indicators show non‑deliverable forwards opening in the ₹87.11–₹87.13 band, triggering fears of a below‑87 breach. Overseas investors offloaded a net ₹56.4 billion (USD 689 million) in equities and ₹5.3 billion in bonds on July 28 alone.The Reserve Bank of India intervened to moderate losses, though expert consensus suggests limited appetite for large‑scale revaluation unless downward pressure intensifies. Analysts argue that as long as the dollar‑rupee pair remains above ₹86.62, modest stability can return—but crossing critical thresholds may erode confidence.Currency pressure compounds the export sector’s vulnerability to U.S. tariffs, threatening margins in labour‑intensive and raw‑material sectors. For trade‑dependent enterprises, FX risk and pricing volatility converge with tariff uncertainty to elevate operational fragility. Market participants are now factoring RBI action, macro signals from U.S. policy, and trade message clarity into immediate strategy planning.