The Indian Rupee dropped to an all-time low on Monday, weighed down by a prolonged impasse in US-India trade talks and continued foreign outflows from domestic stocks and bonds.
The Rupee slipped 0.3% to 90.74 per US Dollar, surpassing its previous record low of 90.55 set on 12th December.
Despite being Asia’s worst-performing currency this year, it avoided sharper declines, likely due to central bank intervention, according to four traders cited by Reuters news agency.
The Rupee has fallen nearly 6% against the Dollar so far this year, as hefty US tariffs of up to 50% on Indian goods have weighed on exports to its largest market and reduced the attractiveness of local equities to foreign investors.
Overseas investors have net sold over $18 billion in Indian stocks in 2025, making India one of the hardest-hit markets for portfolio outflows. In December alone, foreign investors have net sold more than $500 million in Indian bonds.
India’s trade data for November is expected later on Monday, with economists forecasting a goods deficit of $32 billion, down from October’s record $41 billion.
Comments from India’s chief economic adviser suggesting that a trade deal may only materialise by March have weighed on market sentiment, with outflows remaining steady, according to a trader at a Mumbai-based bank.
Meanwhile, 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 not gained from the generally weaker Dollar, even as the Dollar index has fallen 1.1% so far this month.
The next support level for the Rupee is at 90.80, beyond which it could breach 91 and move toward 92. The RBI appears to be allowing the market to set the price, intervening only to curb excessive volatility.
ANZ analysts note that while an India-US trade deal might trigger a short-term rebound in the Rupee, its gains could be limited if the RBI decides to rebuild reserves by buying Dollars.
India’s foreign exchange reserves stood at $687.3 billion as of 5th December, down from a year-to-date peak of $703 billion in early September.
India’s benchmark equity indices, the BSE Sensex and the Nifty 50 each fell 0.2%, mirroring losses in regional markets as sentiment remained subdued ahead of a week packed with key data releases and central bank meetings.