The Indian rupee has tumbled to a fresh all-time low against the US dollar, breaching previous records as market sentiment sours over stalled trade talks and subdued foreign fund flows. The currency's weakness persists despite the country announcing impressive economic growth figures.
Rupee's Steep Decline Amid External Pressures
On Tuesday, December 2, 2025, the rupee (INR) traded perilously close to its historic low, shedding 22 paise to reach 89.75 against the US dollar in early sessions. This slide followed a sharp fall on Monday, where the currency dropped to 89.73, breaking past its previous record low of 89.49 set just a fortnight earlier.
The rupee has depreciated by more than one full rupee against the greenback since November 3, highlighting a sustained period of pressure. This downward trajectory is primarily attributed to the unresolved US-India trade agreement, which has cast a shadow over market optimism.
Strong GDP Fails to Halt the Slide
Notably, this currency depreciation is unfolding against a backdrop of robust domestic economic performance. The decline comes just ahead of the Reserve Bank of India's (RBI) monetary policy meeting and, ironically, despite India reporting a robust GDP growth of 8.2% for the second quarter on Friday.
The market's focus has clearly shifted from strong domestic fundamentals to external vulnerabilities. Traders cited persistent corporate demand for US dollars, inconsistent selling of dollars by exporters, and speculative trading positions as immediate drivers pushing the rupee lower.
RBI's Likely Intervention to Defend the 90 Level
According to a Reuters report, the Indian central bank is suspected to be actively selling US dollars in the market to prevent the rupee from crashing through the psychologically crucial barrier of 90 against the dollar. Such intervention aims to curb excessive volatility and provide stability, though it faces headwinds from broader global and trade-related factors.
The absence of a concrete trade deal with the United States continues to weigh heavily on investor sentiment, overshadowing positive domestic news and leading to weak capital flows into Indian markets.
