The Indian rupee slid to an all-time low on Monday, weighed down by stalled trade negotiations with the United States and relentless foreign investor outflows, even as a softer dollar offered little relief.
The currency weakened 0.3% to 90.74 against the U.S. dollar, breaching its previous record low of 90.55 hit on December 12, according to market data. Despite the sharp fall, losses were capped by likely intervention from the Reserve Bank of India (RBI), four traders told Reuters.
The rupee has now fallen nearly 6% so far this year, making it Asia’s worst-performing currency in 2025. Analysts say pressure has intensified as steep U.S. tariffs of up to 50% on Indian goods dent exports to India’s largest market and erode the appeal of domestic assets for overseas investors.
Foreign portfolio investors have sold more than $18 billion worth of Indian equities in 2025, placing India among the hardest-hit markets globally. In addition, foreign investors have net sold over $500 million in Indian bonds in December alone.
India’s November trade data, due later on Monday, is expected to show a goods trade deficit of $32 billion, narrowing from a record $41 billion in October, according to economists’ estimates.
Market sentiment has also been weighed down by remarks from India’s Chief Economic Adviser, who said a U.S.-India trade deal is unlikely before March. “Outflows have been near-constant,” a trader at a Mumbai-based bank told Reuters, adding that the prolonged deadlock has dampened investor confidence.
Compounding the pressure, India and the European Union are also unlikely to finalise a trade agreement by the end of this year, Bloomberg News reported on Friday.
As a result, the rupee has failed to benefit from a weaker greenback. The dollar index is down 1.1% so far this month, yet emerging market currencies such as the rupee have remained under strain.
“The next support (for rupee) is at 90.80, after which we could see a crossover of 91 towards 92. RBI has clearly let the market determine the price and has been intervening only to control any excessive volatility,” Anil Bhansali, head of treasury at Finrex Treasury Advisors, said.
Analysts at ANZ said that while an eventual India-U.S. trade deal could trigger a short-term rebound, gains may prove temporary if the RBI opts to rebuild foreign exchange reserves by buying dollars.
India’s foreign exchange reserves stood at $687.3 billion as of December 5, down from a year-to-date peak of $703 billion in early September, official data showed.
Meanwhile, domestic equities mirrored the cautious mood. The BSE Sensex and Nifty 50 both slipped 0.2%, tracking losses across regional markets as investors braced for a week packed with key economic data releases and central bank meetings.
