<h1>Central bank sells dollars to defend currency as tariffs, FII outflows and softer dollar shape FX and monetary policy</h1> The central bank intervened in FX markets, selling dollars to prevent the rupee breaching its all-time low, after which the rupee strengthened modestly to 87.59 against the US dollar. Concurrently, the imposition of additional 25% US tariffs on Indian goods and significant foreign institutional investor equity outflows restrained further appreciation. Market drivers cited included a softer dollar index, easing Brent crude futures and domestic equity declines. The developments implicate central bank foreign-exchange operations, trade policy shocks from foreign tariffs and cross-border capital flows under the framework of applicable foreign exchange and monetary regulations.