Rupee slides near all-time low as dollar strength bites markets
Rupee slides near all-time low as dollar strength bites markets
The rupee slides near an all-time low at 90.84 per dollar amid persistent FII outflows and a firm dollar, as December exports rise and the trade deficit widens.
The rupee closed at 90.84 per U.S. dollar, down 50 paise after a third straight session of declines. It opened at 90.37 and touched an intraday low of 90.89, staying just above its lifetime low. Traders pointed to a persistent outflow of foreign funds and a firm dollar internationally as the main drivers, even as domestic buyers stepped in to pick up value in some names.
Exports rose 1.87% to $38.5 billion in December 2025, helping cushion the impact of the broader weakness but not enough to reverse the trend in the currency. The trade deficit widened to $25.04 billion for December, from $24.53 billion in November, according to the latest data. A wider deficit and higher crude oil prices kept the rupee under pressure as market participants weighed external factors against domestic demand.
On the global front, the dollar strengthened after stronger U.S. unemployment claims and firmer manufacturing data, pushing the greenback higher against most currencies. Traders said the rupee would continue to face headwinds with foreign institutional investors pulling money out of Indian markets and crude staying elevated. A negative bias is likely as market watchers monitor trade deal talks and geopolitical tensions.
Although oil prices have cooled somewhat, the overall environment remains fragile for emerging-market currencies. The central bank's stance and policy expectations, along with evolving global risk sentiment, will determine whether the rupee can stabilise near the 90.50–91 range or test fresh lows in the near term.
Investors and importers alike will be watching the next set of data and policy statements for clues on monetary stance and inflation outlook. In the meantime, the currency market remains volatile, reflecting the tug-of-war between external shocks and domestic demand.
