The Indian rupee has extended its downward spiral, hitting fresh record lows around 90.91 against the US dollar as of December 15, 2025, following a sharp sell-off that saw it touch 90.96 recently, amid heavy foreign fund outflows, robust importer demand for dollars, and mounting uncertainty over an India-US trade deal.
This builds on Monday’s close at 90.78 after an intra-day low of 90.80, with the currency opening weakly at 90.79 on Tuesday from Friday’s 90.49 level. Forex traders and experts like VK Vijayakumar of Geojit Investments Limited point to a silver lining in November’s trade deficit narrowing to $24.53 billion from October’s $41.64 billion, potentially easing pressure on foreign institutional investors (FIIs).
Dilip Parmar of HDFC Securities labels it Asia’s worst-performing currency despite this data, while Anuj Choudhary of MiraeAsset ShareKhan anticipates near-term volatility in the 90.30-91 range, with possible relief from Reserve Bank of India (RBI) interventions, a softer dollar, or global central bank policies from the Bank of England (BOE), European Central Bank (ECB), and Bank of Japan (BoJ). No official RBI comments have been issued yet, but market watchers remain vigilant.
Escalating Sell-Off Reveals Deepening Vulnerabilities
The rupee’s malaise traces back to a 29-paise drop on Monday, capping a week where it shed 17 paise on Friday alone, marking its lowest-ever levels at the time. Traders report persistent risk aversion in global markets, coupled with strong dollar buys from oil importers and other sectors, as key culprits keeping the domestic unit under siege.
VK Vijayakumar elaborated to media, “The currency is likely to stabilise since November trade deficit has come down to $24.53 billion from $41.64 billion in October. This will take away some pressure on FIIs to sell anticipating further depreciation.”
Recent trading data underscores the strain: the pair climbed 0.40% daily to 90.91 on December 15 but reflects a 2.56% monthly loss and over 7% yearly decline, amplifying concerns for import-dependent households and businesses facing higher costs for essentials like fuel and electronics.
Historical Context and Looming Challenges Ahead
This episode fits a broader pattern of rupee weakness, exacerbated by geopolitical tensions, elevated US interest rates drawing capital abroad, and stalled progress on bilateral trade pacts that could bolster exports.
The currency opened Monday at 90.53 in the interbank market, extending losses from prior sessions amid fears that delayed India-US negotiations might prolong the pain.
\Dilip Parmar told PTI, “The Indian rupee plunged to a record low, positioning it as the worst performer among the Asian currencies. Despite the better-than-expected trade balance number, the rupee was unable to find support.”
Anuj Choudhary cautioned, “The rupee is expected to trade with a negative bias amid delay in Indo-US trade deal and FII outflows. A weak dollar and any intervention by the RBI may also support the rupee at lower levels.”
Investors now eye upcoming monetary policy cues from major central banks, which could influence dollar strength and provide breathing room, though sustained FII selling linked to domestic equity dips poses ongoing risks.
The Logical Indian’s Perspective
As the rupee’s tumble ripples through everyday lives hiking prices for imports, squeezing family budgets, and testing small businesses this moment calls for empathetic, collaborative action rooted in dialogue, transparency, and kindness to nurture economic harmony and coexistence.
Policymakers must prioritise swift trade resolutions, RBI vigilance, and incentives for domestic production to shield vulnerable communities and foster inclusive growth that uplifts all Indians, not just markets. By embracing shared responsibility, we can transform volatility into resilience.
