Indian Rupee All-Time Low: Will it Hit 92 Next?

The Indian rupee all-time low touched 91.08 against the US dollar on December 16, 2025, breaching a psychological barrier that currency markets had long defended. According to ANI, the domestic unit fell to this historic level amid continued foreign fund outflows and weak capital inflows, cementing its position as Asia's worst-performing currency in 2025. The rupee has now declined 5.5 percent year-to-date, with experts warning that volatility will persist through January as year-end trading volumes thin out and fresh inflows remain absent.

What are the Key Factors Behind Rupee’s Fall Below 91?

Three primary factors drove the Indian rupee to an all-time low on Tuesday. According to banking and market expert Ajay Bagga speaking to ANI, continued FPI net outflows, low FDI flows, and the lack of progress on the US-India trade deal represent the main contributors. 

Reuters reported that overseas investors have net sold Indian stocks worth more than $18 billion in 2025. Foreign investors also net sold bonds worth over $500 million in December alone, creating sustained dollar demand in the market. The stalled US-India trade talks have left Indian exporters facing American tariffs of up to 50 percent, according to Commerce Secretary Rajesh Agrawal.

How has RBI reacted to the slide?

The Reserve Bank of India's intervention strategy has notably shifted in recent weeks. Ajay Bagga told ANI that the RBI has remained largely on the sidelines even as the rupee fell against the weaker US dollar. Four traders confirmed to Reuters that the central bank conducted dollar sales on December 15 to curb volatility when the rupee hit 90.74, but these interventions have become markedly less aggressive. 

RBI Governor Sanjay Malhotra told Bloomberg on December 5 that the central bank only intervenes to manage excessive volatility, clarifying there has been no conscious attempt to change tolerance levels. The muted response suggests authorities may be willing to tolerate steeper declines in the near term.

How Does India Compare To Other Asian Currencies?

India's currency performance stands in stark contrast to regional peers. According to Ajay Bagga speaking to ANI, Thailand's baht gained 8 percent in 2025 despite political turmoil and economic weakness in that country. 

India, with strong domestic consumption, stable macroeconomic conditions and large foreign exchange reserves, has recorded the worst-performing currency in Asia during calendar year 2025. 

As per Reuters, the rupee has declined 5.5 percent year-to-date, making it one of the worst-hit markets in terms of portfolio outflows across the region.

Does A Weaker Rupee Actually Help Indian Exporters?

The impact on exporters presents a mixed picture. Kishore Narne, Director and Head of Commodity at Motilal Oswal Financial Services, told ANI that a weaker rupee provides some relief to exporters, helping them absorb tariff and global demand pressures. 

Ajay Sahai, Director General of the Federation of Indian Export Organisations, told South China Morning Post that the depreciation is allowing exporters, including apparel and footwear producers, to absorb part of the tariff burden. 

However, Narne also noted clear trade-offs. According to him, rupee weakness raises imported inflation, especially through energy and commodities, widens the current account deficit, and increases the cost of servicing dollar debt.

Can The US Trade Deal Stop The Rupee's Slide?

Commerce Secretary Rajesh Agrawal reportedly told reporters in New Delhi on December 15 that India and the US are very close to closing the initial framework deal. 

Six rounds of negotiations have been completed, covering both a comprehensive bilateral trade agreement and a narrower interim deal. According to Agrawal, there's a fair expectation that both countries will be able to agree to a deal to lower reciprocal tariffs. 

The Commerce Secretary stated that the United States absorbs roughly 18 percent of India's total goods exports, with Indian exporters facing 30 percent higher tariffs from the US compared to other countries. Market experts believe progress on this front could provide intermittent relief to the currency.

How Far Could The Rupee Fall From Here?

Currency expert K N Dey told ANI that the rupee has moved into uncharted territory, making it very difficult to predict how far it will go. As per Ponmudi R, CEO at Enrich Money, the rupee-dollar pair has convincingly broken above the long-defended 90 psychological barrier. 

He reportedly said that resistance is seen at 90.80-91.00, and a sustained breakout could extend the move toward 91.50-92.00 in the coming weeks. 

Dilip Parmar of HDFC Securities reportedly told that the immediate market resistance for the spot USDINR pair now sits at 90.70 and the crucial support level has shifted to 90.10, confirming sentiment remains heavily skewed toward further weakening.

Why Will Volatility Continue Through January?

K N Dey told ANI that with year-end approaching, markets will be thin but volatility could remain high. 

According to him, even if there is a revision of US tariffs, it may not bring any major relief to the rupee. Fresh inflows may only materialize after the middle of January, meaning pressure on the currency will persist for several more weeks. Market expert Banerjee told Asianet Newsable that there are incremental positives around the India-US trade deal which could provide intermittent relief, with expectations of a broad trading range of 89.50-91.00 on spot. 

However, the combination of thin year-end trading volumes, continued foreign portfolio investor outflows, and delayed capital inflows suggests the Indian rupee all-time low could face further tests in coming sessions.

(yMedia and ANI are content partners for this story)