Rupee hits new record low: Currency weakens to 90.46 versus US dollar; RBI likely intervened to stem fall

The Indian rupee tanked to a fresh record low on Thursday, going past the 90 mark versus the US dollar again. The rupee has been depreciating sharply this year, influenced by ongoing challenges on the India-US trade deal front and increased corporate dollar demands.The rupee declined to 90.4675 versus the US dollar, surpassing its previous historic low of 90.42 recorded on December 4.The Reserve Bank of India (RBI) reportedly stepped in on Thursday to prevent further depreciation of the rupee's value, five traders were quoted as saying by Reuters.The rupee has declined over 5% against the dollar in 2025, ranking as the third-poorest performer amongst 31 primary currencies, with only the Turkish lira and Argentina's peso showing greater losses.

This downward trend is significant, coming at a time when the dollar's strength measure has reduced by more than 7%.Several elements contribute to the rupee's negative performance, including growing trade deficits, hefty 50% US tariffs on Indian goods, and outward foreign capital movement. The lack of successful negotiations with the Donald Trump administration has further weakened the currency's position.The currency continues to experience pressure after falling past the crucial 90 mark, which is 50% of its 2011 value.

This situation creates additional difficulties for RBI governor Sajay Malhotra and central bank officials in their efforts to maintain balance between rupee flexibility and market steadiness, while steering clear of past financial issues.India's capital controls restrict the rupee's convertibility, requiring RBI's participation in both domestic and international markets for intervention. In global markets, rupee trading occurs primarily through non-deliverable forwards (NDFs), which are derivatives contracts setting exchange rates with dollar settlements.The RBI implements interventions via the Bank for International Settlements, working alongside selected major banks as trading partners in continuous markets operating across Singapore, Dubai and London.