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The Indian Rupee weakens in Monday’s Asian session.  US Dollar demand, sustained portfolio outflows, and rising global uncertainty continue to undermine the INR.  RBI intervention might cap the downside for the local currency.  The Indian Rupee (INR) declines on Monday, pressured by increased US Dollar (USD) demand, possibly linked to the non-deliverable forwards market. Additionally, sustained foreign portfolio investors (FPI) outflows, the concern about an economic slowdown in India, and the uncertainty of US President Donald Trump’s tariff policies contribute to the INR’s downside.  However, USD sales by state-run banks, though most likely on behalf of the Reserve Bank of India (RBI), might help limit the local currency’s losses. In the absence of the top-tier economic data releases from the US and India on Monday, the USD/INR pair will be influenced by the USD.  Indian Rupee remains vulnerable amid multiple headwinds The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) decided to cut the policy repo rate by 25 basis points (bps) to 6.25% for the first time in nearly five years.  RBI Governor Sanjay Malhotra said the central bank was keeping its policy stance “neutral,” which would open more space to support growth, signaling further rate cuts. The RBI forecasts headline inflation for FY25 at 4.8%, while the projection for FY26 remains unchanged at 4.2%. The Indian central bank estimates real GDP growth for the next year to be at about 6.7% for the first quarter (Q1), 6.7% for Q2, 7% for Q3, and 6.5% for Q4.  US President Donald Trump said on Friday he plans to announce reciprocal tariffs on many countries by Monday or Tuesday, to take effect almost immediately, per Reuters.  The US Nonfarm Payrolls (NFP) rose by 143K in January, compared to the 307K increase (revised from 256,000) seen in December, according to the…

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Filed under: News - @ February 10, 2025 3:15 am