The Indian rupee made an unwelcome piece of history on Wednesday, December 3, 2025, by crashing through the psychological barrier of 90 against the US dollar for the first time ever. The domestic currency closed at an all-time low of 90.15, marking a sharp decline of 19 paise from its previous close.
Key Factors Behind the Rupee's Historic Slide
According to insights from foreign exchange traders, a combination of domestic and international pressures triggered the rupee's fall. Uncertainty surrounding the progress of the India-US trade deal emerged as a significant external headwind, dampening investor sentiment towards emerging market currencies like the INR.
Compounding the issue was the perceived stance of the Reserve Bank of India (RBI). Traders noted that a lack of aggressive intervention by the central bank to stem the rupee's decline added further downward pressure, allowing the local unit to breach the critical 90 mark.
Market Reaction and Trader Sentiment
The trading session was dominated by bearish sentiment for the rupee. The breach of the 90 level is seen as a major technical and psychological threshold, potentially opening the door for further weakness if the prevailing negative factors persist. Market participants are now closely watching for any official communication or action from the RBI or the government to address the currency's volatility.
Implications and the Road Ahead
A currency at record lows has wide-ranging implications for the Indian economy. It can lead to increased costs for imports, contribute to inflationary pressures, and affect corporate balance sheets with foreign debt. The focus now shifts to whether the Reserve Bank of India will step in more forcefully in the coming days to stabilize the rupee and how developments in the India-US trade negotiations unfold, as these will be crucial in determining the currency's near-term trajectory.
