Rupee Slides to Fresh All-Time Low of 90.58 Against US Dollar

The Indian rupee extended its losing streak on Monday, slipping to a fresh all-time low of 90.58 against the US dollar, underscoring mounting pressure on the domestic currency amid a challenging global and domestic environment.

This marks the second consecutive week in which the rupee has touched record lows, after closing at 90.55 per dollar on Friday.

The latest slide reflects a continuation of familiar headwinds that have weighed on the rupee for months. Market participants point to delays in finalising a trade agreement with the United States, persistently weak capital inflows, and a widening trade deficit as key factors dragging the currency lower. Adding to the pressure is strong corporate demand for dollars, particularly from importers and companies servicing overseas obligations.

Experts say the situation has been aggravated by steep US tariffs of up to 50 per cent on certain Indian exports, which have dampened export competitiveness and hurt dollar inflows. As a result, the rupee has struggled to find support even on days when the global dollar has weakened.

So far this year, the rupee has depreciated by more than 5 per cent against the US dollar, making it the third-worst performing currency among 31 major global currencies. Only the Turkish lira and Argentina's peso have fared worse. This underperformance stands out given that the dollar index has declined by over 7 per cent during the same period, suggesting that the rupee's weakness is being driven more by domestic and bilateral factors than by broad dollar strength.

The move past the psychologically significant 90-per-dollar mark has drawn particular attention. Analysts note that the rupee's value has effectively halved since 2011, highlighting the long-term erosion in purchasing power. The breach of this milestone has also increased scrutiny on Reserve Bank of India (RBI) Governor Sajay Malhotra, who faces the delicate task of allowing market-driven currency movements while ensuring overall financial stability.

In recent months, the RBI has frequently stepped into the foreign exchange market to curb excessive volatility and slow the pace of depreciation. However, traders say the central bank's interventions have appeared relatively less aggressive since the rupee weakened beyond the 88.80 level and later crossed the 90 mark. This has led to speculation that the RBI may be willing to tolerate a weaker rupee, provided the fall remains orderly.

The central bank continues to play a crucial role in managing the rupee's trajectory, including through its participation in offshore markets such as non-deliverable forwards (NDFs), which are settled in dollars. These interventions are typically carried out via the Bank for International Settlements, in coordination with select large banks across major trading centres, including Singapore, Dubai, and London.

Going forward, analysts believe the rupee's direction will hinge on progress in trade negotiations with the US, trends in global capital flows, and the RBI's approach to market intervention. Until clearer signals emerge on these fronts, the currency is likely to remain under pressure.