Rupee Slips to New Record Low

USDINR increased to an all-time high of 90.56.

Over the past 4 weeks, US Dollar Indian Rupee gained 2.2%, and in the last 12 months, it increased 6.72%.

The Indian rupee weakened past 90 per USD, hitting another fresh record low, pressured by corporate dollar outflows, which added to concerns over the absence of a US-India trade deal.

The outflows were driven by Indian companies buying dollars for end-of-year international payments, alongside demand from foreign and local private lenders likely linked to merchant transactions.

These limited relief from a softer greenback following the US Fed’s rate cut and less-hawkish-than-expected comments.

On the trade front, India’s Commerce Secretary Rajesh Agrawal met US Deputy Trade Representative Rick Switzer in New Delhi for two days of discussions aimed at easing trade tensions, including tariffs related to Russian oil purchases.

However, analysts warn that losses in the rupee could deepen if a trade agreement fails to materialize.

The currency is on track for its worst annual decline since 2022, pressured by weak portfolio inflows and steep US tariffs on Indian exports.

The Indian rupee weakened to around 89.9 per USD, trading near record lows, after the Reserve Bank cut interest rates at its December meeting.

The central bank lowered the repo rate by 25 basis points to 5.25%, its first move in six months, after inflation hit record lows and growth stayed firm, a combination policymakers described as a “Goldilocks” backdrop that allowed room to support activity.

The rupee has fallen nearly 5% this year, the weakest in Asia, pressured by soft trade flows, capital outflows and steep U.S. tariffs that have strained exports and pushed the currency near the 90-per-dollar mark.

While most economists expected the cut, some thought the RBI would hold after the rupee’s slide, though expectations of upcoming Federal Reserve easing may help preserve the rate gap and temper further losses.

The central bank kept its neutral stance and indicated this could be the final cut for now, with future support likely delivered through liquidity operations.

The Indian rupee weakened past the psychological key 90 per USD, extending its decline to a fresh all-time low as soft trade and portfolio flows, along with uncertainty over a pending trade deal with Washington, continued to weigh on the currency.

The rupee is among Asia’s weakest performers, down 5% against the dollar so far this year, marking its sharpest annual decline since 2022 as steep US tariffs of up to 50% on Indian goods hurt exports to its largest market and dampen foreign investor appetite for Indian equities.

The country’s robust Q3 GDP did little to lift the currency and a widening current account deficit added further pressure.

Attention now turns to the Reserve Bank of India’s upcoming policy meeting on December 5, where most economists expect a 25-bps repo rate cut and a hold through 2026.

Though some argue the strong GDP may warrant keeping rates unchanged.

The Indian rupee weakened to around 89.9 per USD, hitting a fresh record low and signaling a potential break past the key psychological 90 level, as the lack of a US–India trade deal and high tariffs continued to weigh on sentiment.

India remains one of the few major economies without a formal pact with Washington, and uncertainty over lowering tariffs has contributed to a widening current account deficit.

The Reserve Bank of India has intervened to curb volatility, but limited room for further support leaves the rupee vulnerable if no agreement is reached, raising risks of a durable breach of 90.

A robust Q3 GDP print also did little to lift the currency, which remained constrained by trade imbalances, foreign outflows, and persistent dollar demand.

On the policy front, most economists expect the central bank to cut rates on December 5 and hold through 2026, though strong GDP growth may prompt some to keep rates unchanged.

The Indian rupee hovered around 89.5 per USD, under pressure at record lows, as persistent importer dollar demand outweighed the impact of stronger-than-expected GDP data.

India posted its fastest growth in six quarters, with September-quarter GDP surging 8.2%, well above the 7.3% forecast. However, the robust reading did little to lift the currency, which remained constrained by trade imbalances, foreign outflows, and intermittent dollar sales by state banks as large forward positions matured.

Sentiment has struggled since steep US tariffs on Indian exports were imposed in late August, while stalled US-India trade talks added further pressure.

On the policy front, most economists expect the Reserve Bank of India to cut its key rate by 25 basis points on December 5 and hold it through 2026, following earlier reductions of 100 basis points this year.

However, the strong GDP print has led some analysts to predict the RBI may keep rates unchanged, supporting the rupee.