Rupee Falls to Intraday Low of 90.42 But Pulls Back on RBI Support

Mumbai: The Indian rupee on Thursday extended its slide to a new low of 90.42 in early morning trade before nationalized banks acting on behalf of the Reserve Bank of India (RBI) stepped in to ensure that it does not cross the 90.50 level. There were also some corporate inflows that helped the rupee to appreciate to 89.89 before it reversed back to 89.96 from its previous record low close of 90.21 The rupee’s fall is driven by a mix of factors such as a firm US dollar, uncertainty around the Indo-US trade deal and continued demand for dollars from importers and foreign investors. Experts have also pointed out that limited intervention by the RBI is putting further pressure on the currency.

Forex traders said the greenback fell after Automatic Data Processing (ADP) non-farm payroll data came in sharply below forecast, and the weakness in the US dollar index supported the Rupee at lower levels.

At the interbank foreign exchange market, the Rupee opened at 90.41. It slipped further to a record low of 90.42 against the greenback in initial deals. At the end of Thursday's trading session, the Rupee closed at 89.97 up 22 paise over its previous close. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.01 per cent lower at 98.84. Brent crude, the global oil benchmark, rose 0.22 per cent to Rs 62.81 per barrel in futures trade.

Since April 2025, the rupee has weakened sharply from Rs 85.51 to 90.30, marking a 5.6 per cent depreciation placing the rupee among the weakest global performers this year and prompting questions about how much further the rupee might slide. The rupee’s slide comes against the backdrop of the three-day Reserve Bank of India’s Monetary Policy Committee (MPC) meeting that began on Wednesday to decide on interest rates. Economists remain divided between a pause and a cut. While some believe the RBI to cut rates by 25 bps, others do not see any rate cut happening as rupee has fallen to 90.50.

So far in this calendar year, foreign portfolio investors have sold Rs 1.52 lakh crore of shares. In the first three days of December, they have offloaded Rs 8,369 crore of equities. The country’s merchandise trade deficit has hit a massive $41.7 billion in October 2025. Imports have soared to all-time high of $76.1 billion, 16.6 per cent year-on-year increase, mainly driven by surging gold imports for the festive season which has led to higher dollar demand from import dependent industries, putting pressure on the rupee.

Congress President Mallikarjun Kharge said that the economic condition of India is not good. “They always say that we are developing and the economic condition is good. But when the Rupee falls, it shows what your economic condition is,” Kharge said to the media outside the Parliament.

Radhika Rao, Executive Director and Senior Economist at DBS Bank said, “Markets are split ahead of the RBI MPC decision amid strong 8.2% growth and below-target inflation, with a modest rate cut expected despite recent rupee weakness. The rupee slipped past the 90/$ mark to a record low, after the RBI earlier defended levels near 89 through active market intervention. The need to maintain the currency at competitive levels stems from a delay in the US-India trade deal, unfavourable tariff differentials at this juncture, weak equity portfolio flows and a broader focus on manufacturing/ exports.”