The Indian rupee has breached the 90 mark against the US dollar for the first time, hitting a fresh record low on Wednesday, December 3, 2025. The rupee slipped to a new low of 90.14, a fall of 28 paise from its previous close of 89.86. This marks the sixth consecutive session of decline for the Indian currency.
The rupee has been on a downward slide, touching a new lifetime low of 89.92 against the US dollar on December 2. This pushed the rupee past its previous all-time low of 89.7575, recorded just a day earlier on December 1. On December 2, the rupee weakened by 0.3 percent, underscoring persistent pressure despite supportive domestic economic data.
Several factors are contributing to the rupee's decline. High demand for dollars and delays in the India-US trade deal are key pressures. Uncertainty surrounding the reduction of tariffs has also contributed to a widening current account deficit.
Once the rupee broke below the 89.5 level, it triggered small stop-loss orders and prompted aggressive dollar buying from importers, adding more downward pressure on the currency. Market participants noted that the breach of this defended zone indicated weakening support and raised expectations of further depreciation.
Analysts expect the rupee to weaken further, potentially slipping beyond the 91 mark. They attribute this to structural fundamentals and global demand for the US dollar. The Reserve Bank of India (RBI) is expected to intervene to curb volatility. However, limited room for further support could leave the rupee vulnerable if no trade agreement is reached.
The RBI's Monetary Policy Committee (MPC) meeting, scheduled for December 3-5, is expected to provide a clearer stance on the rupee's future trajectory. Some economists anticipate a 25-basis point rate cut by the central bank due to low inflation, while others expect no change given the strong GDP growth rate and the declining value of the Indian currency.
The rupee's 4.8% decline this year makes it Asia's worst performer. The fall has occurred despite a robust Q3 GDP print, which did little to lift the currency, constrained by trade imbalances, foreign outflows, and persistent dollar demand.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said that the rupee depreciation will likely halt and even reverse when the India-US trade deal materializes.
Anindya Banerjee, Head of Commodity and Currency at Kotak Securities, noted that the 90 level is a major psychological barrier. He added that it is essential for the central bank to prevent speculators from becoming too comfortable with a one-way trend, as that can trigger an unnecessary spike in USD-INR volatility.
