Muscat: The Indian Rupee has dropped drastically against the US dollar in the last several days. The Rupee dropped to 87.51 intraday, 60 paisa lower on Wednesday, before closing at 87.42. Oman's Exchange Houses are providing Rs226. 25 for one Omani Rial. As a result, large trading activity was reported on Tuesday and Wednesday, according to sources.
R. Madhusoodanan, a Muscat-based financial expert, told Times of Oman that the rupee's decline since the start of this month, notably Monday's dramatic collapse due to domestic and foreign causes, including geopolitical considerations. Donald Trump recently urged Russia to cease the war against Ukraine in just 10 to 15 days, rather than the 50 days he had previously requested.
If the ceasefire fails, he warns that additional sanctions, including secondary sanctions, may be placed on Russia, and that countries who purchase oil from Russia may be subjected to these secondary penalties. This remark has sparked panic in the crude market, driving the price of oil from $70 to $72 per barrel. India and China are Russia's primary oil purchasers since it is relatively inexpensive.
"After holding steady for some time in July, the rupee fell considerably this week—creating an ideal window for those who had delayed transfers, especially with end-of-month salaries being processed," said Iftekhar Ul Hasan Chowdhury, CEO of Gulf Overseas Exchange.
Furthermore, there is no clarity on the import duties on Indian items to the United States since the Indo-US trade deal is still being negotiated and the deadline set by the Trump government for postponement of the tariffs is July 31.
Domestic factors include India's Industrial Production Index (IIP) falling to 1. 5% in June 2025, the lowest in the last ten months, as well as money outflows from Indian equities and banks shoring up the dollar due to month-end demand from importers.
On Wednesday, the market will take signals from the Federal Open Market Committee (FOMC) of the US Federal Reserve. Experts do not expect any surprise announcements. According to him, the dollar index (DXY) is hovering around the 9899 level.
As of July 19, 2025, India's currency reserves fell by $1. 18 billion to $695. 49 billion, marking the third week in a row decrease.
Despite a 100 basis point reduction in repo rates, the credit off did not occur as intended by policymakers. According to him, the Indian economy is suffering from sluggish GDP growth, a negative impact of US tariffs (India currently has a trade surplus with the United States), stress on oil imports, and repayment obligations due to INR depreciation against the dollar.
The aforementioned national and foreign variables have influenced the Rupee's performance. The decline continues, and even if it surpasses the peak of 88. 10 established in February of this year, I believe there is no need to be concerned. Madusoodanan argued that the exchange rate should be market-determined.
