The Indian rupee weakened beyond the crucial ₹90 per US dollar mark for the first time on Wednesday, as uncertainty surrounding the long-awaited India-US trade deal continued to weigh heavily on market sentiment.
The currency slipped to 90.13 per dollar, surpassing its previous record low of 89.9475 registered on Tuesday. It was trading 0.3% lower intraday. Analysts attribute the sharp decline to limited intervention by the Reserve Bank of India (RBI) and persistent foreign investment outflows.
Ritesh Bhansali, Deputy CEO at Mecklai Financial Services, told Bloomberg News that exporters are holding back on selling dollars in anticipation of further depreciation, while importers continue to drive strong dollar demand.
So far this year, the rupee has fallen 4.9%, making it Asia’s worst-performing currency despite India’s robust economic growth in the July–September quarter.
Further Decline Possible, Analysts Warn
Barclays noted that only a successful India-US trade agreement is likely to offer near-term relief for the currency. HDFC Securities added that with the rupee breaching the psychological 90 mark, it could slip further to 90.30 in the coming days.
Currency expert Anindya Banerjee of Kotak Securities said RBI intervention is critical at this stage.
“If the rupee closes above 90, we may see more speculative bets and a possible move toward 91,” he said, adding that the recent slide is difficult to justify purely on fundamentals.
Jateen Trivedi, VP Research Analyst at LKP Securities, said that muted RBI action has accelerated the rupee’s depreciation. Markets now await clarity from the upcoming RBI monetary policy announcement on Friday.
He added that the rupee is “deeply oversold,” and a rebound above 89.80 is needed for any meaningful recovery.
Trade Deal Delays Adding Pressure
India remains among the few major economies yet to finalize a trade pact with the United States. Prolonged delays, coupled with steep 50% tariffs on Indian exports, have added pressure on domestic exporters. Strong imports have also kept dollar demand high, contributing to a wider current-account deficit in the September quarter.
The currency’s sustained weakness risks discouraging foreign investment. Overseas investors have already withdrawn $16 billion from India’s equity markets this year, raising concerns about inflation in the fuel-dependent economy.
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