MUMBAI: The rupee, which has been the worst performing Asian currency so far this year, hit a new low of 90.47 against the dollar Thursday, losing 0.5% and eclipsing its previous all-time low of 90.42 on December 4.
The unit closed at 90.3675, down 0.4% on the day on RBI intervention, and is on course for its worst yearly fall since 2022 weighed down by continuing portfolio outflows and the delay in the trade deal with the US as steep tariffs have begun to eat into exports.
Weakness in the greenback after the rate cut has offered little relief to the rupee, with traders citing dollar demand from foreign and local private lenders, likely tied to merchant payments.
“Many stop-losses got triggered when the rupee hit a new low and the currency is likely to stay in a downtrend in the near-term," said Dilip Parmar, foreign exchange research analyst at HDFC Securities.
"The next level to watch is 90.70," he added.
The rupee has fallen more than 5.5% against the dollar in 2025, as US tariffs of up to 50% on goods have hurt exports to the country's biggest market and diminished the appeal of local equities.
Foreign investors have pulled out nearly $18 billion from stocks so far this year, making India one of the worst-hit markets in terms of portfolio outflows.
The Reserve Bank likely intervened, but not with a heavy hand, to help avert steeper losses, traders said.
Reserve Bank governor Sanjay Malhotra had said last week that the rupee trading at 90 to a dollar was not a worry point for him and the upwardly revised inflation and GDP forecasts have factored in the impact of the rupee fall.
“The market was expecting an India–US trade deal from the last week of the month but now the government is saying it's likely only by March, which has added to the uncertainty. All of this is putting additional pressure on the rupee. Consequently, we expect FII inflows to be negatively affected, which could further weigh on equity valuations and impact debt markets," said Nachiketa Sawrikar of Artha Global Multiplier Fund.
"A record October goods trade deficit and muted capital inflows, amid uncertainty around a trade deal point to a further deterioration in the net balance of payments position in Q4," analysts at Goldman Sachs said in a note.
"Meanwhile, reduced forex intervention by the RBI over the past one-two weeks has also increased the rupee volatility,” they added.