BRICS member India is likely dumping the U.S. dollar in the forex markets to safeguard the rupee from falling, reported Reuters. The Indian rupee reached an all-time low of 85.96 on January 1, 2025, as the U.S. dollar strengthened. The development ruffled a lot of feathers in the Indian markets as the imports and exports sector took a hit. The Reserve Bank of India (RBI) directed state-run banks to dump millions worth of U.S. dollars to protect the rupee.

Also Read: India Rejecting BRICS Currency

On the direction of the RBI, state-run banks offloaded their U.S. dollar reserves to limit the damage to the rupee. The RBI is likely keeping a close tab on the development and is interfering in the currency markets. This is not the first time that BRICS member India has sold the USD to save the rupee, it has been accused several times of dumping the U.S. dollar.

The RBI is “likely keeping a check on any sharp declines,” said a currency trader on the condition of anonymity. The state-run banks were spotted offloading the U.S. dollar on behalf of the RBI. BRICS country India fears that a declining rupee will lead to inflation in the country that stems out of the imports and exports sector. Therefore, the rise of the U.S. dollar is worrisome as it could wreak havoc on the Indian economy.

Also Read: 23 Countries Show Interest To Join BRICS in 2025

BRICS: U.S. Dollar vs Indian Rupee

The Indian rupee is hanging on a thread against the U.S. dollar and the BRICS member now remains under pressure. Trump’s re-election ignited a rally for the USD making it touch a high of 109.08 in the DXY index.

Also Read: BRICS: 2 Countries Settle $37 Billion Trade in Local Currencies

“The U.S. dollar in the New Year is basically carrying from where it left in 2024. It looks like this dollar rally will not relent till at least the Trump inauguration,” said a currency trader at a bank to Business Insider. “I am a bit surprised that we did not see a bigger pop (on dollar/rupee)” considering the dollar’s up move, he said.