Rupee falls sharply due to blockage in India-US trade deal, reaches record low of 90.56 against dollar

News Topical, Digital Desk : Indian Rupee Hits All Time Low: The Indian rupee hit a new record low on December 12 as sentiments declined due to the lack of a trade deal with the US . Also, a strong dollar and continued foreign outflows kept pressure on the domestic currency. The rupee weakened to 90.56 against the US dollar, falling below its previous lowest level of 90.4675 on December 11. The currency was last at 90.4650, down 0.1% on the day.

At the interbank foreign exchange, the rupee opened at 90.43 against the US dollar, then fell further to 90.56 against the greenback, down 24 paise from its previous close. Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was trading 0.02% higher at 98.37.

What did experts say about the fall in the rupee?

According to PTI report, forex traders said that the rupee is under pressure due to aggressive dollar buying by importers amid rising global prices of precious metals.

Dilip Parmar, Research Analyst at HDFC Securities, said, "Looking ahead, the immediate market resistance for the spot USDINR pair is now at 90.70 and the essential support level has come in at 90.10, well above the previous mark of 89.70. This change in the support floor confirms that the internal sentiment is still inclined towards further weakening of the rupee in the short term."

Meanwhile, the Nifty rose 64 points to 25,963 in the morning session, and the Sensex added 189 points to 84,999. After three days of declines, the market rose for the second consecutive session today.

How much has the rupee depreciated so far this year?

The currency has fallen 1.15% so far this month, while the unit will be down 5.7% in calendar year 2025, the worst among its Asian peers. The currency is heading for its worst year since 2022, when it fell 11%.

According to analysts, the recent decline in the unit comes amid India's widening current account deficit and lack of clarity on the US-India trade deal.

Anil Kumar Bhansali, treasury head at Finrex Treasury Advisors, said the dollar index has been soft but that has not helped the rupee, which has been continuously weakening as foreign portfolio investors (FPIs) are selling Indian equities and debt, and a trade deal still seems a distant dream.

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