The Indian rupee has been on a continuous depreciating spree, with the currency today closing at yet another all-time historic low of 90.73, down 0.3% on the day. The Indian rupee has been one of the worst-performing Asian currencies, having fallen over 6% year-to-date.
In the afternoon session today, the Indian currency plummeted to the 90.78 mark against the US dollar, then only rebounded marginally to 90.73. Here are the rupee levels for today:
- The Indian rupee opened at a record low of 90.45.
- The Indian rupee weakened to a historic low of 90.78.
- The Indian rupee closed at a historic low of 90.73 against the US dollar.
Why is the currency weakening?
1. Stalled US-India trade deal
The biggest contributing factor towards the Indian rupee’s depreciation has been the lack of a trade deal with the US. While last week a US delegation came to India to hold talks on a trade deal, and even Indian Prime Minister Narendra Modi spoke to US President Donald Trump regarding bilateral cooperation, all of this has not translated into a final outcome. Further, India’s chief economic advisor added that a trade deal may come out by March. This has added to the uncertainty which has been lingering in the market for quite some time.
The lack of a trade deal between both countries has impacted Indian corporates, who have been bearing the brunt of these tariffs since June 4, 2025. Further, between the months of May and October, India’s exports to the US have gone down by over 28%.
However, India’s Commerce Minister, Rajesh Agrawal, today expressed optimism over the finalisation of a trade deal. He said, “India and the US are very close to finalising the framework for their proposed bilateral trade agreement,” adding that both nations are working actively towards negotiations.
Additionally, as per reports, India’s trade deal with the European Union is also likely to be delayed and may not get finalised by year-end. Commenting on this, Agrawal said, “We are narrowing down the differences. There is a set of differences on the table where we are not able to agree… we are virtually engaged… These discussions are happening regularly.”
Further, Mexico’s imposition of 50% tariffs on India has added to trade pressure, increasing downward pressure on the currency. Commenting on this, Agrawal said, “Technical-level talks are on. The only fast way forward is to try to get a preferential trade agreement (PTA) because an FTA (free trade agreement) will take a lot of time. So we are trying to see what can be a good way forward.”
2. FII outflows
Foreign investors have been continuously pulling out of domestic equities, weakening the currency. As per a Reuters report, foreign investors have sold over $18 billion of local stocks so far, making it the worst yearly outflow on record.
3. RBI intervention
It has been reported that the central bank’s intervention has been mild, and the RBI has not set any specific target levels for the currency. The RBI’s $5 billion dollar-rupee sell-swap, which is scheduled for December 16, is expected to be fully subscribed, Reuters said in a report. However, it is unlikely that this would support the rupee, considering the measure is being undertaken to inject liquidity and not to help with the currency’s recovery.
Outlook for the rupee
Analysts expect the Indian rupee to breach the 91-level mark by the end of this month and further weaken to the 93 mark by the end of 2026.
“The rupee weakened by 28 paise to 90.70 as delays in the India–US trade deal and continued FII selling kept pressure on the currency. Elevated gold and silver prices have further impacted the import bill, adding to rupee weakness. The currency is likely to trade in a 90.00–91.25 range in the near term.” Jateen Trivedi, VP Research Analyst at LKP Securities said