The rupee fell to a fresh closing low of 90.37 against the US dollar on Thursday, dragged down by persistent foreign outflows from both equities and bonds, along with uncertainty surrounding India’s trade deal with the United States. The currency briefly touched an intraday low of 90.49 before recovering slightly after the Reserve Bank of India intervened through dollar sales, according to dealers. The previous record low was 90.20 on December 3.
With a 0.45% drop on Thursday, the rupee has become the worst-performing Asian currency this year, losing 5.26% against the dollar.
Traders said stop-loss triggers and delayed expectations on the India–US trade agreement contributed to the sell-off. Chief Economic Advisor V. Anantha Nageswaran said most bilateral trade differences have been resolved and a formal deal is expected by March 2026, dampening hopes of a December settlement. Sentiment was further hit after Mexico imposed tariffs of up to 50% on imports from Asian countries, including India.
Dealers said the RBI’s intervention remained measured, consistent with recent weeks, and noted that the central bank is likely reducing its net short forward positions, which had added to volatility earlier.
Market participants expect the rupee to weaken further toward 91 per dollar if outflows persist. Key technical levels are seen at 90.65 and then 91.
In the bond market, yields softened after the RBI accepted government securities at 2–3 basis points below market levels in its OMO purchase auction. The central bank received bids of ₹1.1 trillion against the notified ₹50,000 crore. The 10-year benchmark yield eased to 6.58%, down from 6.63%.
The RBI will conduct a ₹28,000 crore government bond auction on Friday and will continue liquidity operations, including another ₹50,000 crore OMO purchase on December 18. A $5 billion USD/INR buy-sell swap for three years is also scheduled for December 16.