The Indian rupee plunged to an unprecedented low on Tuesday, December 16, 2025, breaching the 91-mark against the US dollar for the first time ever. At 11:38 AM, the currency was trading at 91.075, according to data from the interbank foreign exchange market. That’s a major milestone in a prolonged decline that has seen the rupee weaken nearly 1% against the greenback in just the past five sessions, and more than 5% in 2025 overall—making it the third-worst performing currency among 31 major global peers, behind only the Turkish lira and the Argentine peso.
Trade Headwinds and Foreign Outflows
The rupee’s dramatic slide has sent shockwaves through India’s financial markets. Market experts point to a medley of headwinds: delays in clinching a long-awaited US trade deal, sustained foreign portfolio investor (FPI) outflows, and surging demand for dollars by India’s major corporations. The latest bout of weakness began last week, when the rupee fell 17 paise on Friday to close at 90.49, and then slipped further to 90.53 at Monday’s open. By Tuesday, the currency tumbled to new intra-day lows, finally breaking past 91.
According to analysts, additional pressure has come from the US’s imposition of steep 50% tariffs on some Indian exports. There’s also India’s ballooning current account deficit, as a weaker rupee pushes up the bill for imported commodities and energy. While exporters might find some consolation in exchange gains, most sectors face mounting challenges from rising costs and financial volatility. As Ajay Bagga, a noted banking and market expert, put it: “A weaker rupee has clear trade-offs: it raises imported inflation, widens the current account deficit, and increases dollar debt servicing costs.”
What Could Happen Next?
Despite some improvement in India’s trade deficit, the rupee’s slide hasn’t let up. RBI intervention could stabilize the situation, but so far the central bank has been mostly on the sidelines. Analysts warn that unless there’s progress on major trade agreements or a reversal in foreign investor sentiment, the rupee could remain under pressure for the foreseeable future.
This sharp depreciation not only underscores India’s macroeconomic vulnerabilities but also spotlights ongoing global uncertainties. Businesses and consumers alike should brace for higher costs—especially for imported goods and travel—until the rupee finds firmer footing.
