Image used for representational purposes.
| Photo Credit: Reuters

Image used for representational purposes.
| Photo Credit: Getty Images/iStockphoto

The rupee slumped 5% in 2025 as persistent capital outflows from foreign investors, alongside heightened dollar demand from importers, made it one of the worst-performing Asian currencies.

On the last trading session of 2025, the rupee depreciated 13 paise to close at 89.88 (provisional) against the U.S. dollar as month-end demand and FPIs’ dollar buying kept it lower.

The domestic currency has exhibited a negative bias throughout the year, making it Asia’s worst-performing currency in 2025, with foreign portfolio investors pulling out $16.5 billion from equities this year, further denting investor sentiments, forex traders said.

At the interbank foreign exchange, the local unit opened at 89.89 against the dollar and touched an intra-day low of 89.95 and a high of 89.84 against the American currency.

At the end of Wednesday’s (December 31, 2025) trading session, the rupee was quoted at 89.88 (provisional) against the greenback, registering a fall of 13 paise over its previous close.

On Tuesday (December 30), the rupee rose 23 paise to close at 89.75 against the greenback.

On a year-on-year basis, the rupee has plunged 4.95%. It was quoted at 85.64 on December 31, 2024.

“Since the Trump Administration took over, the rupee has been the worst performing currency in the Asian Region, depreciating by more than 5% during 2025, marking its highest depreciation in the last three years,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

Meanwhile, the Reserve Bank, in its Financial Stability Report (FSR) on Wednesday (December 31), said the rupee had depreciated against the U.S. dollar, reflecting falling terms of trade due to the impact of tariffs and a slowdown in capital flows.

The report further noted that the Indian economy is likely to maintain strong growth, underpinned by robust domestic demand, benign inflation, and prudent macroeconomic policies despite an uncertain and challenging global economic backdrop.

“The domestic financial system remains robust and resilient, bolstered by strong balance sheets, easy financial conditions, and low financial market volatility. Nonetheless, there are near-term risks from external uncertainties – geopolitical and trade-related,” it said.

Mr. Bhansali further said that “consistent outflows by FPIs and stake sales by investors, demand from defence, oil and gold have all impacted the rupee as it fell to its lowest at 91.08 before reined in to control it and bring it up to current levels”.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.10% higher at 98.33.

Brent crude, the global oil benchmark, was trading 0.13% higher at $61.41 per barrel in futures trade.

Forex traders said the USD/INR pair is trading under pressure due to multiple factors, including a shift toward risk aversion, driven by persistent capital withdrawals from foreign investors ahead of the holiday break, alongside heightened greenback demand from importers.

On the domestic equity market front, benchmark-sensitive indices ended 2025 on a high, with the Sensex jumping 545.52 points to settle at 85,220.60, while the Nifty surged 190.75 points to 26,129.60.

Foreign institutional investors offloaded equities worth ₹3,844.02 crore on Tuesday (December 30), according to exchange data.

Published – December 31, 2025 05:04 pm IST

Forex traders said the domestic unit traded in a tight range and hovered around its all-time low level. File
| Photo Credit: The Hindu

Image used for representation purpose only.
| Photo Credit: Reuters

At the interbank foreign exchange market, Rupee opened at 84.06 against the greenback and stayed almost flat throughout the session. File
| Photo Credit: The Hindu

The Rupee on Monday (October 21, 2024) settled flat at 84.07 (provisional) against the U.S. dollar amid strong American currency against major rivals overseas and relentless foreign fund outflows.

“Investors remained cautious and stayed away from riskier assets due to geopolitical uncertainties,” forex dealers said. At the interbank foreign exchange market, the local unit opened at 84.06 against the greenback and stayed almost flat throughout the session. The unit finally settled at 84.07 (provisional) against the dollar, unchanged from its previous session’s closing level.

On Friday, the rupee slipped 1 paisa to close at 84.07 against the U.S. dollar, a tad higher from its all-time low of 84.09 recorded on August 5 this year.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.19% to 103.50.

Brent crude, the international benchmark, surged 1.42% to ₹74.10 per barrel in futures trade. On the domestic equity market front, Sensex declined 73.48 points, or 0.09%, to settle at 81,151.27 points. The Nifty also fell 72.95 points, or 0.29%, to 24,781.10 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth ₹5,485.70 crore, according to exchange data.

Analysts attributed the unabated outflow of FIIs to a further rate cut by the Chinese central bank and a muted sentiment towards domestic corporate earnings.

According to RBI data released on Friday, India’s forex reserves declined by $10.746 billion to $690.43 billion for the week ended October 11. In the preceding week, the reserves had dropped by $3.709 billion to $701.176 billion.

“A marginal decline in the value of the greenback against overseas currencies and rise in the domestic equity market supported the local unit and prevented further slide in the domestic unit,” forex traders said.
| Photo Credit: The Hindu

“Rupee depreciated two paise to close at 83.98 (provisional) against the U.S. dollar on Thursday (October 10, 2024) amid sustained foreign fund outflows and elevated crude oil prices. However, a marginal decline in the value of the greenback against overseas currencies and rise in the domestic equity market supported the local unit and prevented further slide in the domestic unit,” forex traders said.

At the interbank foreign exchange, the Rupee opened at 83.95, registering a marginal rise of one paisa against the U.S. dollar and traded in a tight range of 83.95-83.98. It settled at 83.98 (provisional), two paise lower than Wednesday’s (October 9, 2024) close of 83.96.

“The Rupee traded in a range-bound manner… a firm tone in the domestic markets supported the Rupee. However… recovery in crude oil prices capped sharp gains,” Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.

“We expect the Rupee to trade with a negative bias on selling pressure from FIIs and geopolitical uncertainty amid the ongoing tensions in the Middle East. A strong U.S. dollar may further pressurise the Rupee. However, positive domestic markets may support the Rupee at lower levels,” he said, adding that Rupee spot price is expected to trade in a range of 83.80-84.20.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.02% to 102.91 points. Brent crude, the international benchmark, gained 1.45% to $77.69 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex rose 144.31 points or 0.18% to close at 81,611.41 points, while the Nifty was up 16.50 points or 0.07% to 24,998.45 points. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth ₹4,562.71 crore, according to exchange data.

“The Indian Rupee remained steady as the RBI left repo rate and CRR unchanged at 6.5% and 4.5%, respectively,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
| Photo Credit: The Hindu

The Rupee traded in a narrow range and settled for the day higher by just one paisa at 83.96 (provisional) against the U.S. dollar on Wednesday (October 9, 2024), after the Reserve Bank of India (RBI) kept its key interest rate unchanged and shifted its stance to ‘neutral’ that may lead to a cut in benchmark rates in forthcoming policies.

Forex traders said the Reserve Bank’s monetary policy action was in line with street expectations. Moreover, a muted trend in domestic markets and positive U.S. dollar weighed on investor sentiments.

At the interbank foreign exchange market, the local unit opened at 83.92 and finally settled for the day at 83.96 (provisional), higher by one paisa over its previous close of 83.97 against the dollar.

The Reserve Bank of India on Wednesday (October 9, 2024) kept the policy rate unchanged for the tenth time in a row but shifted its stance from ‘withdrawal of accommodation’ to ‘neutral’ that may lead to a cut in the forthcoming policies.

The monetary policy committee, which included three RBI officials and an equal number of new external members, voted five-to-one to keep the benchmark repurchase or repo rate — which governs the interest rate of home, auto, corporate and other loans — at 6.5% for a 10th straight policy meeting.

“The Indian Rupee remained steady as the Reserve Bank of India (RBI) left repo rate and CRR unchanged at 6.5% and 4.5%, respectively, in line with street expectations,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

“We expect the Rupee to trade with a negative bias on selling pressure from FIIs and geopolitical tensions in the Middle East. A strong U.S. dollar may further pressurise the Rupee.

“Dollar is trading at the highest levels in eight weeks. However, a recovery in the domestic markets and weak crude oil prices may support the Rupee at lower levels,” Mr. Choudhary said, adding that traders may take cues from the Federal Open Market Committee (FOMC) meeting minutes which will indicate U.S. Fed’s further rate cut path.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was up 0.09% to 102.63 points. Brent crude, the international benchmark, gained 0.82% to $77.81 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex declined 167.71 points or 0.21%, to close at 81,467.10 points, while the Nifty was down 31.20 points or 0.12% to 24,981.95 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday (October 8, 2024), as they offloaded shares worth ₹5,729.60 crore, according to exchange data.

On September 26, the Rupee declined eight paise to settle at 83.66 against the American currency. File
| Photo Credit: The Hindu

The Rupee declined four paise to settle at 83.70 (provisional) against the U.S. dollar on Friday (September 27, 2024) amid subdued domestic equity markets and increased month-end demand for the American currency.

“However, sliding crude prices in the international market and renewed foreign fund inflows supported the local unit and restricted the fall,” forex dealers said.

At the interbank foreign exchange, the local unit opened at 83.64 and moved between the high of 83.62 and the low of 83.71 during the session. The local unit finally settled at 83.70 (provisional) against the dollar, registering a loss of four paise from its previous close.

On Thursday (September 26, 2024), the Rupee declined eight paise to settle at 83.66 against the American currency. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.06% to 100.30.

Analysts said the market participants were awaiting cues from the personal consumption expenditure data to be released in the U.S. on Friday (September 27, 2024.) Brent crude, the international benchmark, fell 0.03% to 71.58 in futures trade.

On the domestic equity markets front, the Sensex fell 264.27 points or 0.31% to settle at 85,571.85, while the Nifty declined 37.10 points or 0.14% to 26,178.95.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday, purchasing shares worth ₹629.96 crore, according to exchange data.

On July 24, the Rupee depreciated two paise to hit its all-time closing low of 83.71 against the U.S. dollar. File
| Photo Credit: The Hindu

The Rupee fell one paisa to close at an all-time low of 83.72 (provisional) against the U.S. dollar on July 25, dragged down by demand for the American currency in the overseas market and significant foreign fund outflows.

Forex traders said the fall in domestic unit came on the heels of a significant downturn in the Indian equity markets, sparked by the government’s decision to hike the tax rate on capital gains.

At the interbank foreign exchange market, the local unit opened at 83.72 and touched an intra-day high of 83.66 and a low of 83.72 against the dollar during the session.

It finally settled at an all-time low level of 83.72 (provisional) against the American currency, down one paisa from its previous close. On July 24, the Rupee depreciated two paise to hit its all-time closing low of 83.71 against the U.S. dollar.

“The local unit appreciated slightly during the intra-day trade on supposed intervention by the Reserve Bank of India (RBI) and overall weakness in crude oil prices,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

“We expect the Rupee to trade with a slight negative bias on weak global markets and fresh FII outflows. However, weak U.S. dollar and declining crude oil prices may support the Rupee at lower levels. intervention by the Reserve Bank may also support the Rupee,” Mr. Choudhary added.

The government’s decision to hike the tax rate on capital gains dampened market sentiment, exerting immense pressure on the Rupee and the equity market.

In the domestic equity market, the 30-share BSE Sensex fell 109.08 points or 0.14% to settle at 80,039.80 points and Nifty dropped 7.40 points or 0.03% to 24,406.10 points.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 104.17, lower by 0.21%. Brent crude futures, the global oil benchmark, fell 1.79% to $81.25 per barrel.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth ₹5,130.90 crore, according to exchange data.