Indian Rupee Crashes To New All-Time Low Against UAE Dirham

The currency was last quoted at 87.9050 (23.95 UAE dirham) as of 09.40 a.m. IST, down 0.5 per cent on the day.

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State-run banks were spotted selling dollars before the local spot market opened, most likely on behalf of the RBI, traders said.

The rupee seemed on track to open around the 88 handle but the dollar selling intervention helped the currency hold above the psychologically important level.

U.S. President Donald Trump said on Sunday that he will introduce fresh 25 per cent tariffs on steel and aluminium imports into the U.S., along with reciprocal tariffs on all countries this week to match the rates levied by them.

The dollar index was higher at 108.3, while Asian currencies declined 0.1 per cent to 0.6 per cent.

The rupee has fallen continuously since Trump's victory in the U.S. elections last November and has declined about 4.5 per cent since then.

The currency's quick slide has also come in the backdrop of slowing economic growth and persistent foreign outflows.

Overseas investors have pulled out over $7.5 billion, on a net basis, from Indian stocks and bonds so far this year.

Amid these challenges, the RBI has stepped in routinely to curb excess volatility in the currency. The frequent interventions have weighed on India's FX reserves (INFXR=ECI), opens new tab, which are hovering near an 11-month low.

"We believe the risks to INR over coming months are skewed towards relative weakness. If the broad USD were to weaken, we believe the downside in USD/INR would be mitigated by active RBI FX purchases," Nomura said in a note.