The Reserve Bank of India (RBI) skipped purchasing the US dollar in July this year for the first time in a decade. The last time the RBI skipped dollar purchases was in 2014, and it is a first in 11 years now. It is reported that the rupee came under severe pressure, which led to the central bank pausing purchases.

“The RBI did not purchase any US dollars in July 2025 because of significant pressure on the Indian rupee, which led the RBI to intervene by selling dollars to stabilise the currency rather than buying them,” Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, told MoneyControl.

The rupee is under significant stress against the US dollar as it dipped to 88.81 last week. India’s central bank paused the dollar purchases to protect the rupee from further decline. The INR is down 0.06% on Monday and is attracting weaker sentiments.

Also Read: Venezuela Liquidates Larger Volumes in USDT Than the US Dollar

India Struggles to Protect the Rupee From Falling Against the US Dollar

India’s foreign exchange reserves stood at $699.736 billion in July this year. However, since the RBI did not purchase dollars, the overall reserves fell to $688.871 billion in August. That’s a steep fall of $10.865 billion in just a month.

Apart from the US dollar, India is now diversifying its central bank reserves with gold, other currency assets, and special drawing rights (SDRs) issued by the IMF, among others. The falling rupee is looking to gain control against the US dollar by latching on to other assets.

However, India’s domestic factors also play a pivotal role in the rupee dipping against the dollar. The Indian market has seen an outflow of foreign investors that has affected the Sensex and Nifty. Trump’s tariffs on India have also shaken the domestic market, reducing export competitiveness and revenues. All of these developments have formed a gridlock against the rupee in the currency markets.