The Indian rupee continued its downward slide on Monday, marking its fourth straight session of losses. It breached the 91-per-dollar mark during trading hours before settling at 90.92 against the US currency. This closing level represents a decline of 14 paise from the previous session.
Sustained Pressure on the Currency
Dealers pointed to ongoing foreign fund outflows as a primary driver of the rupee's weakness. Risk aversion among investors, fueled by global trade uncertainties, added further downward pressure. The domestic unit opened the day at 90.68 in the interbank foreign exchange market. It then slipped to an intra-day low of 91.01 before finding some footing.
Monday's close of 90.92 sits just a paise above the rupee's record-low closing level. On December 16, 2025, the currency had touched an all-time intra-day low of 91.14. It closed that day at 90.93, making the current levels alarmingly close to historic lows.
Market Dynamics and Analyst Views
Market participants noted that weakness in domestic equities overshadowed potentially supportive factors. A softer US dollar and easing crude oil prices failed to lift the rupee. Investor sentiment took another hit after former US President Donald Trump issued fresh tariff warnings. He cautioned European countries about potential tariffs if they opposed his plans related to Greenland, injecting more uncertainty into global trade.
Anuj Choudhary, a research analyst at Mirae Asset ShareKhan, explained the currency's persistent pressure. "The rupee remains under stress due to continuous FII outflows and weak local markets," he stated. Choudhary highlighted that dollar demand from corporates and hedgers also weighed on the domestic currency.
He added that risk aversion stemming from geopolitical tensions between the US and Europe could maintain a negative bias. "FII outflows and uncertainty around trade deal talks may continue to pressure the rupee," Choudhary noted. However, he pointed to some potential support factors. "A weak dollar and easing tensions between the US and Iran could provide some support at lower levels."
Choudhary pegged the near-term trading range for the USD-INR pair at Rs 90.60 to 91.30.
Broader Market Context
The rupee's decline extended losses from the previous session. On Friday, it had already tumbled 44 paise to close near its historic low at 90.78. This followed declines in the preceding sessions, creating a consistent downward trend.
Global indicators showed mixed signals. The dollar index, which measures the greenback against six major currencies, fell 0.23% to 98.97. Brent crude futures also slipped, declining 0.94% to $63.53 per barrel.
Domestic equity markets mirrored the currency's weakness. The Sensex fell 324.17 points, or 0.39%, to close at 83,246.18. The Nifty declined 108.85 points, or 0.42%, settling at 25,585.50. Exchange data revealed that foreign institutional investors sold shares worth Rs 4,346.13 crore on Friday, underscoring the outflow pressure.
The combination of these factors paints a challenging picture for the rupee in the near term. Market watchers will closely monitor foreign fund flows, global trade developments, and domestic economic indicators for further direction.
