The rupee (INR) fell by 32 paise, reaching a all-time low of 89.85 against the US dollar during early trading on Tuesday, on the backdrop of absence of a US-India trade agreement overshadowed the effect of impressive economic growth.
On Monday, the rupee fell to 89.73 against the US dollar, dropping below its earlier record low of 89.49 reached around two weeks ago.
The currency has fallen by more than a rupee against the US Dollar since November 3, based on the available data. In 2025, the rupee has fallen about 4–5% so far, making it one of the poorest-performing Asian currencies.
This decline in the currency occurs just before the Reserve Bank of India (RBI) policy meeting and in spite of a robust GDP growth of 8.2% for the second quarter announced on Friday. The RBI is set to convene the Monetary Policy Committee meeting between December 3, 2025, and December 5, 2025.
As per a report from Reuters, traders indicated that the Indian central bank is probably selling US dollars to prevent the rupee from dropping below 90. The currency’s decline is being driven by corporate demand for dollars, inconsistent supply from exporters, and speculative trading positions.
Analysts suggest that although the country remains at the forefront of worldwide growth statistics, the behavior of its currency reveals a contrasting narrative — marked by continual stress and fluctuation. Every effort to bounce back has been temporary, hindered by consistent demand for the dollar and ongoing ambiguity concerning India’s trade relations with the US.
Rahul Kalantri, VP Commodities, Mehta Equities explained that slow export growth, uncertainty around trade deals—especially with the US—and continued foreign investor outflows have all pushed demand for the dollar higher. Escalating geopolitical tension and the sudden crash in crypto currencies have driven safe-haven flows into the dollar, weighing on the rupee.
Further, Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, also noted that the persistent decline of the rupee is a discouraging factor affecting foreign institutional investor (FII) inflows. A reasonable trade agreement between India and the US could help stabilize the rupee, but this negotiation has been delayed for an extended period.
On Monday, December 1, 2025, FIIs were net sellers in the Indian stock market. According to provisional data from the National Stock Exchange (NSE), FIIs registered a net sell of ₹1,139.85 crore. As of November 30th, FIIs had sold equities totaling ₹15,659.31 crores.
INR Outlook
Amit Pabari, MD, CR Forex Advisors, said that USD/INR is expected to trade within 88.90–89.80 in the near term, with 88.80–89.00 acting as a strong support zone. Dollar demand continues to outweigh global relief, limiting appreciation moves.
“A decisive break below 88.80 would be the first indication that the rupee is finally able to build sustained strength, while 89.80–89.00 remains a firm resistance area,” said Pabari.
Rahul Kalantri added that this week, INR is expected to remain volatile, with USD/INR likely moving within the 88.55–90.80 range.
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