The Indian rupee slipped to a fresh record low of 90.15 per US dollar. This was lower than the December 2, 2025, close of 89.96 and signalled renewed pressure on the currency. The fall came just a day after the rupee touched another record low. Persistent foreign portfolio investor outflows and the lack of progress on a United States–India trade deal overshadowed India’s strong domestic macroeconomic indicators.
Rupee Slide Hits Hard
The rupee has fallen nearly 5% against the dollar this year, making it one of Asia’s worst-performing currencies. A major reason behind the decline is the record-high trade deficit. There has been a sharp rise in imports, especially gold and silver, while exports have dropped. As a result, India’s merchandise trade gap widened to 41.68 billion dollars, increasing demand for the US dollar.
Weak portfolio inflows and muted trade activity have added further strain. Pressure from the United States tariffs has also affected confidence. Foreign investors have withdrawn almost 17 billion dollars from Indian equities this year, creating additional pressure on the currency.
Looking ahead, the rupee may continue to face downward pressure. Weak capital flows and the wider trade deficit will keep demand for dollars elevated. Uncertainty over a United States–India trade agreement may also contribute to the pressure.
The Reserve Bank of India (RBI) is actively intervening to slow the decline. However, the strong US dollar and continued outflows may push the rupee even lower. Much will depend on how external conditions improve in the coming months.
