The Indian rupee weakened to a record low for the fourth straight session on Tuesday, weighed down by dollar demand linked to likely maturity of positions in the non-deliverable forwards (NDF) market and continued foreign portfolio outflows.
The currency fell to 90.8275, eclipsing its previous record low of 90.7875 hit a day earlier.
The rupee has fallen 6% against the U.S. dollar so far in 2025, making it one of the worst-performing emerging market currencies, as steep U.S. tariffs on Indian exports have hurt trade and foreign portfolio flows.
Overseas investors have net sold over $18 billion of local stocks this year, and are on track for the largest annual outflows ever. India’s benchmark equity indexes, BSE Sensex and Nifty 50 were down about 0.4% each in early trading.
While likely maturity of positions in the non-deliverable forwards market contributed to the pressure on the rupee, dollar sales by state-run banks, most likely on behalf of the Reserve Bank of India, helped cap the slide, traders said.
“The rupee’s weakness is being driven primarily by tariff-related concerns and foreign investor selling, not by deterioration in economic fundamentals. As long as these short-term imbalances persist, pressure may continue,” said Amit Pabari, managing director at FX advisory firm CR Forex.
“In the very near term, 90.00–90.20 remains a strong support zone (for the rupee), while 90.80–91.00 acts as a key resistance area,” he said.
India-US trade deal key for rupee’s fortunes
Analysts say a reversal in the rupee’s fortunes is unlikely unless there is a breakthrough in U.S.-India trade negotiations.
“Let’s see what happens in the next few months,” India’s trade secretary said on Monday, referring to the ongoing negotiations but added that India is engaged with the U.S. to see if they can close the deal “sooner than later”.
A rebound in India’s exports last month and resilient economic growth have helped blunt the impact of steep U.S. tariffs, easing immediate pressure on New Delhi to clinch a trade deal, analysts say.
India’s exports to the U.S. grew 21% year-on-year in November, helping narrow the merchandise trade deficit to a five-month low of $24.53 billion.
