Rupee slips below 90-mark against dollar for the first time

The rupee has slipped by 5.3% against a dollar so far this year. This has made the rupee, Asia’s worst performing currency so far in 2025. This has been the sharpest decline in its value since 2022.

New Delhi: The Indian rupee fell below the 90-mark against the US dollar for the first time on Wednesday, dragged by persistent equity selling by foreign portfolio investors and uncertainty around the US-India trade deal as PM Narendra Modi's government rolls out the red carpet for Russian President Vladimir Putin.

The rupee hit a record low of 90.29 against the dollar in intra-day. It closed at 90.19, which is 0.4 per cent down from the previous day.

The rupee has slipped by 5.3 per cent against a dollar so far this year. This has made the rupee, Asia’s worst performing currency so far in 2025. This has been the sharpest decline in its value since 2022.

According to SBI Research, the decline in the value of the Indian currency is being driven to the edge by “trifecta of limbos in US-India trade deal, FPI outflows, chiefly equities (after two years of robust inflows) and RBI’s clear stance of distancing itself from an ’interventionist regime’, while wagering all it takes on excessive volatility by traders, arbitrageurs and jobbers.”

“At present, the ability of market participants to supply greenback is quite limited, leaving the Mint Street as the last resort and ultimate supplier of USD to the market, but the RBI has likely chosen a restrained approach, avoiding aggressive interventions as part of its policy to not protect any level,” SBI Research said in a note.

“Additionally, once the rupee breached the 90-level, several exotic options like barriers were triggered, amplifying volatility and accelerating the pace of depreciation,” it said.

The rupee has slumped from 85-90 per dollar in less than a year, among the quickest fall in terms of the number of days. Earlier, the rupee took 1,815 days to reach from 65-70 per dollar, 581 days from 70-75 per dollar and almost 800-900 days for 75-80. From 80-85 per dollar, it was also within a year.

Veteran banker Uday Kotak said pulling of money out of Indian equities by foreign investors is among the key reasons for the rupee slide.

"The proximate reason: foreign selling of Indian stocks both FPI & PE under FDI. Indian investors buying. Time will tell who is smarter. For now foreigners seem smarter. 1 year nifty $ return is 0. But this is a long game. Time for Indian business to shake out of its comfort zone," Kotak posted on X.

Foreign portfolio investors have offloaded around Rs 1,48,010 crore worth of stocks so far this year.  

Uncertainties around the US-India trade deal have weighed on the rupee. While India has expressed hope that the first tranches of the deal would be signed by the year-end, analysts said Putin’s visit to New Delhi is unlikely to go well with the Trump administration and thus the deal might be delayed further.

Putin is scheduled to land in New Delhi on Thursday. This will be his first visit to India since the start of the Ukraine war.