The Indian rupee plunged to a new all-time low on Thursday (February 6), touching 87.55 against the US dollar, surpassing its previous record from the day before.
 
The decline is attributed to rising dollar demand, likely influenced by activity in the non-deliverable forwards market.

The rupee slipped 0.1% to 87.55, breaching its prior low of 87.4875, recorded on Wednesday, Reuters reported.

However, intervention from state-run banks—most likely acting on behalf of the Reserve Bank of India (RBI)—helped contain further losses, according to three traders who spoke to Reuters, including one with direct knowledge of the matter.

Despite the RBI’s efforts, the pressure on the rupee remained strong due to persistent dollar buying. 

The offers from state-run banks are "quite strong," but the dollar buying pressure is persistent as well, one trader noted.

Additionally, the daily dollar-rupee reference rate was quoted at a premium of 0.50 to 0.60 paisa, indicating increased demand for the greenback.

The rupee has been on a sustained downward trajectory in recent months, weighed down by weak portfolio inflows, uncertainty surrounding US trade policies, and growing expectations of interest rate cuts by the RBI.

So far this year, the rupee has depreciated by approximately 2%, making it the worst-performing currency in Asia.