Indian Rupee slides to new record low beyond 90 per Dollar

The rupee has been one of Asia’s weakest-performing currencies this year, weighed down by India’s current account deficit and persistent foreign investment outflows.

Investor optimism fades after trade setbacks

Early trade discussions between New Delhi and Washington earlier this year had boosted expectations of increased foreign capital inflows, helping the rupee strengthen to 83.75 in May—its highest level in nearly six months.

However, stalled negotiations and lacklustre corporate earnings have prompted overseas investors to withdraw more than $16 billion from Indian equities so far this year.

Analysts cite supply–demand imbalance and limited RBI action

By Wednesday morning, the rupee had weakened as much as 0.35%, touching a symbolic new low of 90.19, according to Bloomberg data.

Dilip Parmar of HDFC Securities told AFP that the decline was “first and foremost” due to an “imbalance of demand and supply,” while trade uncertainty and foreign fund outflows accelerated the slide.

Another contributing factor, he said, was the absence of “big and impactful” intervention from the Reserve Bank of India (RBI).

RBI favors flexibility over defending symbolic levels

Analysts noted that while the RBI has periodically intervened by selling dollars to stabilise key levels, the central bank now appears more willing to let the currency adjust naturally.

“Defending a specific level in the current macro backdrop would be costly and counterproductive,” said Raj Gaikar of SAMCO Securities.

With inflation running below earlier expectations, he added, policy priorities have shifted toward supporting growth rather than using reserves to maintain an artificial exchange rate.

Gaikar expects the rupee to stabilise within an 88–92 range, adding that the RBI’s “hands-off approach signals a shift toward a more market-aligned currency regime.