The Indian rupee continued its losing streak on Tuesday, closing at a record low of 89.87 against the US dollar. The stalled India–US trade deal and persistent FPI outflows from equities have added to the downward pressure on the currency.
Rupee expected to depreciate further
The rupee fell for the fifth straight session, touching a fresh low of 89.95 per dollar — down 0.45% from Monday’s close of 89.54. The currency briefly hit the 90-per-dollar level in the inter-bank order matching system before recovering some losses. Analysts quoted by Reuters said the rupee may weaken further, although continued RBI intervention is expected to help limit volatility.
“The 90 level is a major psychological barrier — and a cluster of buy-stop orders likely sits above it. This is precisely why the RBI must remain active below 90; if the pair starts sustaining above this zone, the market could quickly shift into a higher trending phase toward 91.00 or even higher,” said Anindya Banerjee, Head, Commodity and Currency at Kotak Securities.
At this stage, it is essential for the central bank to prevent speculators from becoming too comfortable with a one-way trend, as that can trigger an unnecessary spike in USD-INR volatility, Banerjee added.
Rupee may touch 91-level
The psychologically crucial 90-per-dollar level remains the immediate resistance for the currency. Despite strong GDP growth, analysts expect the rupee may eventually breach the 91 mark.
Market now awaits the RBI’s MPC meeting scheduled for December 3-5 which is expected to provide a clearer stance on the rupee’s future trajectory. Additionally, some economists expect a 25-basis rate cut by the central bank owing to low inflation, while others expect no change given the strong GDP growth rate and the declining value of the Indian currency.
