New Delhi: The Indian Rupee continued its downward trajectory on Monday, inching closer to the 91-per-dollar mark and touching a fresh all-time low, driven by sustained foreign portfolio investor (FPI) outflows and mounting external pressures.
At the time of filing this report, the Rupee was trading at 90.904 against the US dollar, after hitting an intraday low of 90.957. The currency has now depreciated by more than 5 per cent on a cumulative basis so far this year.
Market experts attributed the weakness primarily to persistent selling by foreign investors across both equity and bond markets. Anindya Banerjee, Head of Currency and Commodity at Kotak Securities, said the USD-INR pair remains under pressure due to continued FPI outflows. However, he noted that developments around the India-US trade deal could offer intermittent support. Banerjee expects the Rupee to trade within a broad range of 89.50 to 91.00 in the near term.
Manoj Kumar Jain, Director and Head of Currency Research at Prithvi Finmart, echoed similar concerns, pointing to heavy FPI selling in domestic equities as a key factor behind the Rupee’s decline. He also cited record trade deficits and the imposition of a fresh 50 per cent trade tariff on Indian goods by Mexico as additional triggers for the latest fall.
Jain said the Rupee has slipped to record lows against major global currencies, though a softer dollar index and optimism surrounding India-US trade negotiations could provide some cushion at lower levels. He expects the currency to remain volatile this week, with the USD-INR pair likely to move between 89.65 and 91.40 amid fluctuations in global markets and ahead of key economic data releases from the US and China.
The weakening Rupee has also had a ripple effect on domestic commodity prices, with gold prices in India rising nearly 60 per cent so far this year.
Akshat Garg, Head of Research and Product at Choice Wealth, said the Rupee’s performance reflects increasing pressure from a combination of global uncertainty and domestic capital flow challenges. He noted that foreign investors continue to reduce exposure to Indian equities and debt, leading to sustained dollar outflows. At the same time, strong dollar demand from importers and delayed conversions by exporters, who expect further depreciation, have created a supply-demand imbalance.
Garg added that despite the US dollar weakening globally, the Rupee has remained under strain due to these domestic factors. He also pointed out that while the Reserve Bank of India has been active in the market to smooth volatility, it appears to be allowing a gradual adjustment rather than defending any specific exchange rate level.
In the near term, analysts expect the Rupee to remain volatile, with movements driven largely by capital flows, global sentiment and ongoing trade-related uncertainties rather than underlying economic fundamentals.
