The Indian Rupee has hit an all-time low of Rs. 90 per US dollar due to continued volatility in the global economy and ongoing domestic economic challenges. The rupee lost value to an intraday record low of 90.15 on Wednesday, before regaining some ground at Rs. 90.02.
Weakening trade flows, a growing trade deficit, FPI outflows, and uncertainties regarding the ongoing negotiations regarding the India-US trade agreement also added to the decline.
Foreign Portfolio Investors (FPIs) have been net sellers in December, with total net sales of Rs 4,335 crores over just two trading days.
In addition, year-to-date FPI outflows have reached Rs. 1,48,010 crore, adding pressure on the rupee. Also, India's trade shortfall increased to a record $41.7 billion in October 2025.
A significant portion of this increase is attributed to a surge in demand for Gold, which saw an almost tripling of import levels to $14.7 billion. Conversely, US exports were down by 28%.
The equity markets reflected the rupee's downward trend with further declines in all the major benchmark indices. By 11:50 am (Indian Standard Time), the Nifty 50 Index had dropped to a low of 25,930, while the Sensex had fallen by 225 points to 84,912.
As per analysts, the ongoing slide in the rupee has unsettled many foreign institutional investors, despite very strong corporate earnings and a strong rebound in India's GDP for FY2022-23.
As Dr V.K. Vijayakumar of Geojit Financial Services suggests, the lack of a proactive intervention from the Reserve Bank of India may well cause the depreciation of the rupee to continue, leading to a continued outflow of equity from market participants to the foreign institutional investors.
Market players highlighted that sales from Government-owned banks continue to provide increased sales in USD at increasing price points. This has contributed to the downward pressure in the rupee.
Despite the rupee’s fall, some global indicators offered some relief. A softer dollar index (99.22) and a mild dip in Brent crude prices to $62.43 per barrel helped limit a sharper decline.
Currency strategists warn that the rupee could weaken further toward 91 per dollar if the RBI maintains a hands-off stance.
With the RBI’s Monetary Policy Committee meeting underway and a rate decision due on December 5, followed closely by the US Federal Reserve’s announcement on December 10, the currency market is bracing for volatility.
Stabilization could come from the India-US trade agreement, expected later this month. However, the impact will depend heavily on the tariff structure.