Rupee Plummets to Record Low: Breaches 90.58 Against US Dollar

The Indian Rupee (INR) has continued its downward trend, hitting a new record low of 90.58 against the US dollar on Monday. This marks the second consecutive week of record lows for the currency, following a previous low of 90.55 on Friday.

The rupee's depreciation is being driven by several factors, including delays in reaching a US trade agreement, consistently weak capital inflows, and a widening trade deficit. Experts also cite strong corporate demand for dollars and the impact of steep 50% US tariffs on Indian exports as contributing to the rupee's decline.

This year, the rupee has fallen more than 5% against the US dollar. Among 31 major global currencies, the rupee's performance ranks as the third-worst, surpassed only by the Turkish lira and Argentina’s peso. This decline has occurred even as the dollar index has decreased by over 7%.

The crossing of the 90 mark against the dollar is particularly noteworthy, representing a significant drop from its value in 2011. Analysts suggest this milestone puts additional pressure on Reserve Bank of India (RBI) governor Sajay Malhotra to carefully manage currency flexibility while maintaining overall market stability.

The Reserve Bank of India has frequently intervened in recent months to moderate the rupee's decline. That said, the reality is a bit more complicated. these interventions have appeared less forceful since the currency weakened past the 88.80 level and then exceeded 90 per dollar. The RBI remains a key player in the rupee’s international trading, including its activity in non-deliverable forwards (NDFs) settled in dollars. These interventions are conducted through the Bank for International Settlements, in coordination with selected major banks across trading hubs like Singapore, Dubai, and London.