Mumbai: The Indian rupee breached the Rs 90 per US dollar mark on Wednesday, slipping to a record low of Rs 90.13 — the first time the domestic currency has fallen beyond the Rs 90 threshold.
Only a day earlier, the rupee had hit its previous all-time low at Rs 89.9475. At around 10 am, the rupee was trading at 90.11 per US dollar. At that point of time, it was showing no signs of stabilising.
What’s driving the slide
Persistent foreign capital outflows — especially from portfolio investments — have weakened demand for the rupee, contributing heavily to the depreciation.
Importers’ strong dollar demand meanwhile continues unabated, while exporters are reportedly holding back on dollar sales amid the depreciating currency.
The absence of a concluded India–United States trade deal — still in limbo — is injecting risk-averse sentiment into markets, undermining investor confidence in the rupee.
Analysts note that a lack of decisive intervention by the Reserve Bank of India (RBI) has allowed speculative pressures to mount against the currency.
Because of these pressures, the rupee has already depreciated by nearly 4.9 per cent this year, making it among the worst-performing Asian currencies in 2025.
What analysts and institutions are saying
According to currency strategists, only a concrete India–US trade agreement is likely to provide a near-term floor to rupee’s slide.
Meanwhile, some market watchers caution that, without intervention, the rupee could slide further — possibly toward Rs 90.30 or beyond.
Some believe the current drop is difficult to justify purely on fundamentals, pointing instead toward speculative headwinds.
Investors and import-reliant businesses face the risk of higher costs, while exporters could benefit — though uncertainty and volatility in currency markets continue to dampen sentiment.
Implications for the economy
The currency’s slip beyond Rs 90 may inflate costs of imported goods and raw materials, including crude oil and other essentials — potentially feeding into broader inflationary pressures. This shift could strain businesses reliant on imports and squeeze household purchasing power.
On the flip side, exporters garnering revenue in dollars might see a wind-fall when converting earnings back into rupees — though much depends on how exchange-rate volatility plays out.
Moreover, foreign investors — already spooked by outflows — may adopt a cautious stance toward Indian assets, which could affect broader market sentiment and capital flows in coming months.
