Rupee slips to all-time low of 89.76 against US Dollar

Rupee slips to all-time low of 89.76 against US Dollar

The Indian rupee dropped to a new lifetime low on December 1 despite stellar Q2 GDP growth print. The rupee declined to 89.76 against the US dollar, dipping past its previous record low of 89.49 hit about two weeks back.

Rupee has depreciated nearly 1 rupee against US dollar since November 3. Rupee has been one of the worst performing currencies against dollar in 2025. Rupee performed better than only Turkish Lira and Argentine Peso in 2025. Rupee closed the session at 89.5475, down 0.1% on the day.

India’s 8.2% year-on-year GDP reading for July–September sent equities to record highs and nudged bond yields higher on Monday, but did little to shift the currency.

Overseas investors sold about $400 million of Indian equities on Friday, taking year-to-date outflows past $16 billion, while the 10-year government bond yield inched up to 6.553%, near a one-week high, reported Reuters.

Maturity of large positions in the non-deliverable forwards market also weighed on the rupee on Monday, a trader told Reuters. Data released post market hours on Friday showed that the RBI's forward book expanded to over $63 billion in October.

"The Indian Rupee continued its downward trend, depreciating for the fourth straight session to hit a record low against the US Dollar. This significant decline is fuelled by strong market demand for the dollar coupled with constrained supply. The sustained weakness is primarily attributable to a widening trade deficit, the delayed India-US trade deal, and limited intervention from the central bank.

"The outlook for the rupee to remain under pressure versus the US dollar for the coming days, as the underlying imbalance between demand and supply for the US Dollar is likely to persist. In the near term, spot USDINR has resistance at 89.95 and support at 89.30," said Dilip Parmar – Senior Research Analyst, HDFC Securities.

"Goods export growth is already slowing, and if high tariffs remain, risk to India's growth, current account, and balance of payments will worsen, likely warranting a further weakening of the rupee," ANZ said in a note.

While comments from US and Indian officials last month had raised hopes that the steep 50% tariffs on Indian exports would soon be reduced, the lack of a concrete deal has weighed on the rupee, reported Reuters.

The tariffs have dented trade and portfolio flows into equities, leaving the currency reliant on central bank interventions for support.

Foreign investors have net pulled out over $16 billion from Indian equities over the year so far.

India's merchandise trade deficit hit an all-time high in October.