The Indian currency, which has been under continuous pressure over the week, almost breached the 92 mark today as it hit a new historic low of 91.96 against the US dollar.
The currency had opened at 91.41, slipped to an intraday low of 91.96 before stepping up and closing at 91.94 against the greenback. On Wednesday too, the currency had hit a low of 91.70.
Analysts have added that persistent selling of equities by foreign investors is one of the major triggers for the rupee. “Foreign institutional investors have already pulled out nearly $3.5 billion from Indian equities this month, pushing the Nifty 50 down close to 5% in January,” CR Forex Advisors MD Amit Pabari told FinancialExpress.com.
According to provisional data available on the NSE for January 23, FIIs have been sellers of domestic equities worth Rs 16,267 crore.
What is adding pressure on the currency?
Lack of materialisation over a US-India trade deal, geopolitical uncertainties surrounding the US, EU and Greenland, and economic tensions over tariffs continue to add to the rupee slump.
Concerns have also been raised over the Asian currency’s continuous depreciation, as analysts have pointed out that so far in January, the domestic currency slumped by over 2%. For 2025, the rupee was the worst-performing Asian currency as it plummeted by over 5%.
Additionally, currency experts expect the currency to depreciate further, citing a strong dollar index and deferred expectations of a rate cut by the US Federal Reserve. Also, with the rupee’s ongoing fall, traders have added that importer hedging has increased, which is adding to the currency’s free fall.
How much will the RBI intervene?
While the RBI had been actively intervening over the past weeks to help the currency hold levels, according to the RBI’s latest bulletin, the central bank’s net dollar sales have already exceeded their FY25 levels.
Pabari pointed out that by November 2025, over $43 billion were already sold in the spot market, which is around 28% higher than the previous year.
He added that RBI intervention is already active in the market, and it is likely that the central bank may intervene smoothly in the near term to help bring down excessive moves in USD/INR.
Outlook for Rupee
Analysts believe the 92 level to be the psychologically crucial level for the currency. The rupee is expected to remain under pressure in the near term, with a weak trading range of 91.35–92.25,” Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said.
Additionally, Pabari expects that if the rupee breaches the 92 mark, it would trade in the 92.20–92.50 range. However, consistent RBI intervention could help stabilise the currency and gradually pull USD/INR back toward the 90.80–91.00 range over the near term.