Rupee falls further against the dollar, breaches the 91 threshold for the first time

The currency fell 0.3% to 91.0750, hitting a record low for a fourth consecutive session. The rupee had declined past 90 for the first time on 3 December.

A man counts Indian currency notes at a market in Bengaluru, India, August 1, 2025 | Reuters

Mumbai: The Indian rupee breached the 91-per-dollar threshold for the first time on Tuesday, pressured by increased hedging activity and portfolio outflows amid a deadlock in trade negotiations between the U.S. and India.

The currency fell 0.3% to 91.0750, hitting a record low for a fourth consecutive session. The rupee had declined past 90 for the first time on December 3.

The rupee has fallen more than 6% against the dollar so far in 2025, making it one of the worst-performing emerging market currencies, as steep U.S. tariffs on Indian exports hurt trade and portfolio flows.

Overseas investors have net sold over $18 billion of local stocks this year, and are on track for the largest annual outflows ever.

India’s benchmark equity indexes, BSE Sensex and Nifty 50, were down about 0.6% each on the day.

While the likely maturity of positions in the non-deliverable forwards market put pressure on the rupee, dollar sales by state-run banks, most likely on behalf of the Reserve Bank of India, helped slow the slide, traders said.

India’s central bank will tolerate a weaker rupee as the country’s external sector confronts multiple headwinds, Reuters reported earlier this month. The rupee is down over 8.5% from its year-to-date peak of 83.77 hit in May.

Analysts say a reversal in the rupee’s fortunes is unlikely unless there is a breakthrough in U.S.-India trade negotiations.

“The path of least resistance is still for USD/INR to rise from here given uncertainty around tariffs, but we are hesitant to chase USD/INR higher at these elevated levels,” MUFG said in a note on Tuesday.

A rebound in India’s exports in November and resilient economic growth have helped blunt the impact of steep U.S. tariffs, easing immediate pressure on New Delhi to clinch a trade deal, analysts say.

India’s trade secretary said on Monday that the Asian country is engaged with the U.S. to see if they can close the deal “sooner than later”.

Shipments to the U.S. grew 21% year-on-year in November, helping narrow India’s merchandise trade deficit to a five-month low of $24.53 billion.

(Reporting by Jaspreet Kalra; Editing by Sonia Cheema and Mrigank Dhaniwala)

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