MUMBAI: The rupee plunged to a new low on Wednesday, recording its biggest single-session fall in two months. It touched 91.7425 during the session and closed at 91.6950, marking its sixth consecutive day of losses. The currency fell 0.8% from its previous close of 90.9750.
The sharp decline came amid a global bond market rout and renewed US threats to acquire Greenland, which kept investors on edge and heightened concerns over capital outflows. Adding to the pressure, domestic equities witnessed a bloodbath for the second consecutive session, further weighing on sentiment.
The rupee opened 10 paise lower at 91.08 from previous close of 90.98 and continued to fall. The previous worst was on December 16, when it had plunged to 91.14.
The fall was exacerbated as the Reserve Bank stayed away from the market, and did not provide dollar supply, despite massive demand from exporters, traders said.
The rupee, the worst performing Asian on the day, is down 2% so far this month, after falling about 5% in 2025 when it closed as the worst Asian currency and the third worst in the world after its Turkish and Argentinian counterparts.
The problem is that all the challenges that had weighed on the rupee in 2025 remain in place and is only adding up. Equity outflows persist and importers are more inclined to hedge than exporters amid expectations of a further depreciation. Foreign investors had sold shares worth $3 billion so far this year piling up of their $19 billion rip-off in 2025, leading to more capital outflows, leaving the currency exposed to further weakness, according to analysts.
Dalal Street fell 0.3% on the day, after registering their biggest drop in over eight months Tuesday and nobody sees this is the end of the pains as Trump tantrums keep piling up.
According to forex traders, geopolitical uncertainties, led by the US threat on taking annexing the icy Greenland and renewed threat of striking against Iran which have led to a ‘sell America’ call have increased risk aversion and placed additional pressure on emerging market currencies.
In 2025 alone, the rupee lost 4.95% and was the worst Asian currency and the third weakest globally after the Turkish lira and the Argentinian peso both of which plunged close to 50% each.
The continuing bloodbath on Dalal Street due to the above cited reasons along with the massive exit of foreign investors—they have taken out close to Rs 36,000 till January 20 from the markets on the backo of ripping of over $18 billion in 2025, also is contributing to rupee pain as this leads to more dollar outflows. The currency had previously hit its lowest intra-day level of 91.14 and closing low of 90.93 against the dollar on December 16, 2025.
Intra-day the equity benchmarks hit new lows with the Sensex sniffing at 81,000 low and the Nifty briefly falling below 25,000 mark.
A treasury official from public sector bank told TNIE that there was RBI intervention on Wednesday as the rupee opened with deep cuts. But the intervention was to control the pace of depreciation and not to change the course of the rupee. I don’t think the central bank would want to burn its reserves as there is too high demand for dollars.
Jateen Trivedi of LKP Securities said the currency remains range-bound with participants awaiting fresh triggers from the forthcoming budget, while the US Fed’s policy decision later this month is expected to add volatility. The rupee is likely to trade between 90.45 and 91.45 in the near-term.
Market participants said strong dollar demand from metal importers weighed on the rupee. The rupee is falling due to a combination of domestic and global factors. Heavy demand for dollars by importers, particularly in the metals sector, is pushing the currency lower. Rising crude oil prices are adding to the pressure, as India’s oil imports become costlier. Globally, trade tensions, geopolitical risks, and volatility in the dollar index are creating uncertainty, further weakening the rupee.
Meanwhile, the dollar index that measures the greenback’s strength against a basket of six currencies, saw sharp volatility and settled at 98.37 on Tuesday, down 0.50%. The fall in the dollar index came amid rising trade war concerns between the US and European countries. Aggressive tariff threats by the US and the possibility of retaliatory tariffs from Europe increased uncertainty in global financial markets.
According to Amit Pabari of CR Forex Advisors, persistent global unease, coupled with a sustained break above 91.07, could gradually open the door toward the 91.70–92 zone, unless restrained by active intervention from the RBI. On the downside, any corrective pullback is likely to find its first line of support in the 90.30–90.50 range.