Mumbai: The Indian rupee fell to a new record low on Thursday, touching around 90.46 against the United States dollar, as pressure from weak trade sentiment and steady foreign fund outflows continued to weigh on the currency. Traders said the Reserve Bank of India likely stepped in during early trade to limit sharper losses, although the central bank appeared focused mainly on calming volatility rather than defending any specific level.
The fall came on a day when the currency market remained cautious due to the lack of progress in the India United States trade deal. Negotiations have slowed in recent weeks, adding uncertainty for exporters and importers. The rupee has already weakened more than five percent this year, making it one of the worst performing Asian currencies in 2025.
According to traders, corporate demand for dollars and continued outflows from equity markets added to the pressure. Foreign investors have withdrawn nearly 18 billion dollars from Indian shares so far this year, mostly due to concerns over global growth and geopolitical tensions.
A separate market report showed the rupee slipped again during the day to near 90.21 as companies rushed to meet their month end payment obligations. Analysts said that even though the US Federal Reserve has cut interest rates, the rupee is not seeing much support because domestic and external risks remain high.
Rating agency Fitch warned that further weakness in the rupee could affect the credit profile of companies with large foreign currency borrowings. Several firms have unhedged dollar exposures, which become costlier when the rupee drops.
Market surveys show traders increasing their short positions on the rupee, expecting the currency to stay under pressure into 2026. Some forecasts suggest the exchange rate could move closer to 94 per dollar by the end of next year if global conditions do not improve and if trade talks with the United States continue to face delays.
Despite the currency weakness, Indian stock markets closed higher on Thursday, with the Sensex rising by more than 400 points on optimism following the recent US Federal Reserve rate cut.
Economists said the RBI is expected to continue managing liquidity and using limited foreign exchange interventions to prevent disorderly moves. Many expect the central bank to keep the repo rate steady at 5.25 percent through the next financial year, focusing on maintaining stability while inflation remains within the target range.