The rupee slumped 28 paise to an all-time low of 90.43 against the U.S. dollar in early trade on Thursday (December 4, 2025), amid substantial Foreign Institutional Investor (FII) outflows and restrained intervention from the Reserve Bank of India (RBI).

Forex traders said that restrained Central Bank intervention ahead of the crucial Monetary Policy Committee (MPC) decision and significant dollar demand from importers have exerted persistent downward pressure on the rupee.

At the interbank foreign exchange market, the rupee opened at 90.36. It slipped further to a record low of 90.43 against the dollar in initial deals, registering a loss of 28 paise from its previous closing level.

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On Wednesday, the rupee breached the 90-levels for the first time to settle at a fresh all-time low of 90.15 against the greenback.

Meanwhile, Chief Economic Adviser (CEA) V. Anantha Nageswaran on Wednesday said the falling rupee is not affecting inflation or exports.

A falling rupee helps outward shipment but makes imports costlier.

Import-dependent sectors such as gems and jewellery, petroleum and electronics may see lower benefits due to a rise in input costs, putting pressure on inflationary expectations, Mr. Nageswaran said at an event on Wednesday.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.14% higher at 98.99.

Brent crude, the global oil benchmark, rose 0.49% to $62.98 per barrel in futures trade.

Forex traders believe investors are adopting a cautious stance amid ongoing trade tensions with the U.S., with expectations of a settlement towards the end of the year.

“It seems that until the trade deal comes, we may see the rupee weaken further, and it may reach the levels of 91.00 soon. With a weak rupee, we do not expect the RBI to cut rates on Friday,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

On the macroeconomic front, India’s GDP has already surprised on the upside, and the latest HSBC India Services PMI — a key index that measures whether businesses are growing or slowing — rose to 59.8 in November, supported by strong new orders.

“But the currency market isn’t trading on growth headlines anymore. It wants stability, clear policy guidance and maybe a trade deal that doesn’t keep slipping away,” said CR Forex Advisors MD Amit Pabari.

Mr. Pabari further added that “now all eyes turn to RBI Governor Sanjay Malhotra on December 5. Investors aren’t just listening to rate decisions. They want to hear his voice on the rupee.” The decision of the RBI Governor Sanjay Malhotra-headed six-member rate-setting panel will be announced on Friday.

The meeting is taking place against the backdrop of falling inflation, rising GDP growth, the rupee crossing 90 against the dollar and ongoing geopolitical tensions.

On the domestic equity market front, Sensex rose 45.99 points to 85,152.80 in early trade, while Nifty was up 14.35 points to 26,000.35.

FIIs sold equities worth ₹3,206.92 crore on a net basis on Wednesday, according to exchange data.

The rupee opened the month with a fresh low of ₹89.7 a dollar and is expected to maintain this level till December 2025, according to experts.

This is the fourth consecutive session in which the rupee has depreciated against the dollar. A delayed U.S.-India trade deal, non-intervention from the RBI and a widening trade deficit are the reasons behind the depreciation, according to Dilip Parmar, Senior Research Analyst at HDFC Securities.

The rupee has been on a declining trend since May 2025, and it hit a fresh low at the end of August at a little more than ₹88 per dollar. After this, analysts forecast that if the central bank did not step in at ₹89 a dollar, it would go as high as ₹90 a dollar.

In November 2025, the rupee was down 0.8% while the dollar was also depreciating, marking a “puzzling” trend, Aditi Gupta, Economist at BoB research, wrote. “Annualised daily volatility was just 1.4% in the first half but increased to 4.9% in the second half,” Ms. Gupta said.

While the widening trade deficit is cited as a factor, she said that the depreciation this time was more a result of the sentiments of traders in the backdrop of uncertainty surrounding the U.S.-India trade deal. “Receding FPI interest in Indian equities has also added to the depreciating currency,” she added.

If the uncertainty continues, the rupee will stay at ₹89 to ₹90 a dollar, the experts concluded.

The rupee depreciated 7 paise from its all-time closing low to 88.80 against U.S. dollar in early trade on Wednesday (September 24, 2025) dragged down by tariff and H-1B visa issues amid persistent foreign fund outflows.

Forex traders said rupee is hovering near its all-time low level as enhanced U.S. tariffs on Indian goods as well as U.S. H-1B visa fee hike dented investor sentiments.

Moreover, investors’ risk-aversion and trade policy uncertainty has also exacerbated the rupee’s depreciation.

At the interbank foreign exchange, the rupee opened at 88.80, registering a decline of 7 paise over its previous close. In initial trade the rupee also touched 88.71 against the greenback.

On Tuesday (September 23), the rupee depreciated 45 paise to close at a fresh all-time low of 88.73 against the U.S. dollar. It had touched an all-time intraday low of 88.82 against the U.S. dollar.

“The H-1B visa fees has only aggravated the overall issues that India and US need to resolve,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Mr. Bhansali further noted that RBI has allowed the weakening considering the plight of the exporters.

“We may see new lows this week towards 89.00 before a pullback could be seen to enable importers to buy dollars,” he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09% higher at 97.35.

Brent crude, the global oil benchmark, was trading 0.24% higher at $67.79 per barrel in futures trade.

On the domestic equity market front, the Sensex dropped 380.48 points to 81,721.62 in early trade, while the Nifty declined 106.45 points to 25,063.05.

Meanwhile, Foreign Institutional Investors offloaded equities worth ₹3,551.19 crore on Tuesday, according to exchange data.