MUMBAI: Amid worsening market conditions, the rupee hit a fresh all-time low on Wednesday, falling 33 paise to 91.30 against the US dollar in early trade. On Tuesday, the currency had closed at a record low of 90.97, down 7 paise, weighed by strong dollar demand from metal importers and continued foreign fund outflows that dampened investor sentiment.
The rupee opened 10 paise weaker at 91.08 compared to the previous close of 90.98, but soon slipped sharply by 33 paise to touch a new lifetime low of 91.30. This marked the sixth consecutive session of losses for the currency.
According to forex traders, heightened geopolitical uncertainties—triggered by US threats of annexing Greenland and renewed warnings of strikes against Iran—have sparked a “sell America” sentiment. This has increased risk aversion and exerted additional pressure on emerging market currencies. So far in 2025, the rupee has depreciated 4.95%, making it the worst-performing Asian currency and the third weakest globally, after the Turkish lira and the Argentine peso, both of which have plunged nearly 50% each.
The continued bloodbath on Dalal Street, coupled with massive foreign investor exits, has further exacerbated the rupee’s woes. Foreign portfolio investors have withdrawn nearly ₹36,000 crore from Indian markets until January 20, following outflows of over $18 billion in 2025 so far. These outflows have led to increased dollar demand, adding pressure on the domestic currency. The rupee had earlier touched an intra-day low of 91.14 and a closing low of 90.93 against the dollar on December 16, 2025.
During intra-day trade, equity benchmarks also hit fresh lows, with the Sensex hovering near the 81,000 mark and the Nifty briefly slipping below 25,000.
A treasury official from a public sector bank told TNIE that the Reserve Bank of India intervened after the rupee opened sharply lower. However, the intervention was aimed at controlling the pace of depreciation rather than reversing the trend. “I don’t think the central bank would want to burn its reserves, as dollar demand remains very high,” the official said.
Jateen Trivedi of LKP Securities noted that the rupee remains range-bound, with market participants awaiting fresh triggers from the upcoming Union Budget. He added that the US Federal Reserve’s policy decision later this month could add to volatility. The rupee is expected to trade in the range of 90.45 to 91.45 in the near term.
Market participants said strong dollar demand from metal importers continued to weigh on the rupee. The currency’s decline is being driven by a mix of domestic and global factors. Heavy dollar buying by importers—particularly in the metals sector—has pushed the rupee lower, while rising crude oil prices have added pressure by increasing India’s import bill. Globally, trade tensions, geopolitical risks, and volatility in the dollar index have heightened uncertainty, further weakening the currency.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six major currencies, witnessed sharp volatility and settled at 98.37 on Tuesday, down 0.50%. The decline came amid escalating trade war concerns between the US and European nations. Aggressive tariff threats from the US and the possibility of retaliatory measures by Europe have increased uncertainty in global financial markets.
According to Amit Pabari of CR Forex Advisors, persistent global uncertainty, along with a sustained break above the 91.07 level, could gradually open the door for a move toward the 91.70–92.00 zone, unless checked by active RBI intervention. On the downside, any corrective pullback is likely to find initial support in the 90.30–90.50 range.