Mumbai: The Indian rupee fell to a record low on Monday, pressured by a prolonged deadlock in U.S.-India trade negotiations and sustained foreign outflows from domestic equities and bonds.
The rupee weakened 0.3% to 90.74 against the U.S. dollar, eclipsing its previous all-time low of 90.55 hit on December 12.
The currency, Asia’s worst performer this year, avoided steeper losses amid likely central bank intervention, four traders told Reuters.
The rupee has declined nearly 6% against the dollar year-to-date, as steep U.S. tariffs of up to 50% on Indian goods hurt exports to its biggest market and diminish local equities’ appeal to foreign investors.
Overseas investors have net sold Indian stocks worth more than $18 billion so far in 2025, making India one of the worst-hit markets in terms of portfolio outflows. Foreign investors have net sold bonds worth over $500 million in December.
India’s trade data for November is due later in the day, with economists pencilling in a $32 billion goods deficit, down from a record high of $41 billion in October.
Remarks from India’s chief economic adviser that the trade deal is likely only by March have bogged sentiment down, and outflows have been near-constant, a trader at a Mumbai-based bank said.
India and the European Union, meanwhile, are also unlikely to finalise a trade deal by this year’s end, Bloomberg News reported on Friday.
This means the rupee has been unable to benefit from a broadly weaker dollar. The dollar index is down 1.1% so far this month.
“The next support (for rupee) is at 90.80, after which we could see a crossover of 91 towards 92. RBI has clearly let the market to determine the price and has been intervening only to control any excessive volatility,” said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
Analysts at ANZ say that while an India-U.S. trade deal could spur a knee-jerk rebound in the rupee, its strength could fade if the RBI chooses to rebuild reserves by purchasing dollars.
India’s foreign exchange reserves stood at $687.3 billion as of December 5, down from the year-to-date peak of $703 billion hit in early September.
India’s benchmark equity indexes, the BSE Sensex and the Nifty 50 were down 0.2% each, tracking losses in regional shares as sentiment remained tepid heading into a week of key data releases and central bank meetings.
(Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala and Rashmi Aich)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibility for its content.
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