Rupee Slides to Record Low Near 91 per Dollar Amid Heavy FPI Outflows and Global Pressures

New Delhi: The Indian Rupee extended its decline on Monday, slipping to a fresh all-time low and edging closer to the 91-per-dollar mark as sustained foreign portfolio investor (FPI) outflows and rising external headwinds weighed heavily on the currency.

During intraday trade, the Rupee touched a low of 90.957 against the US dollar before settling around 90.904 at the time of reporting. The domestic currency has now weakened by over five per cent so far this year, reflecting persistent pressure from capital outflows and global uncertainty.

Currency market participants attributed the fall largely to continued selling by foreign investors in both equity and debt markets. Anindya Banerjee, Head of Currency and Commodity at Kotak Securities, said the USD-INR pair remains under stress due to ongoing FPI outflows. He added that any positive developments related to the India-US trade deal could offer temporary relief, but overall sentiment remains cautious. According to Banerjee, the Rupee is likely to trade in a broad range of 89.50 to 91.00 in the near term.

Manoj Kumar Jain, Director and Head of Currency Research at Prithvi Finmart, pointed to aggressive foreign selling in domestic equities as a major trigger behind the Rupee’s weakness. He also highlighted widening trade deficits and the recent imposition of a 50 per cent trade tariff by Mexico on Indian goods as additional factors accelerating the fall. Jain noted that the Rupee has slipped to record lows against several major global currencies, though a softer dollar index and optimism around India-US trade talks could provide limited support at lower levels.

Jain expects heightened volatility in the coming sessions, with the USD-INR pair likely to fluctuate between 89.65 and 91.40. He said movements will be influenced by global market trends and upcoming key economic data from the US and China.

The declining Rupee has also pushed up domestic commodity prices, with gold prices in India rising nearly 60 per cent so far this year. Analysts said currency depreciation has amplified the impact of global price trends on the local market.

Akshat Garg, Head of Research and Product at Choice Wealth, said the Rupee’s performance reflects mounting pressure from a mix of global uncertainty and domestic capital flow challenges. He noted that foreign investors continue to pare exposure to Indian equities and bonds, leading to sustained dollar demand. At the same time, importers’ strong demand for dollars and exporters delaying conversions in anticipation of further depreciation have created a supply imbalance in the currency market.

Garg added that despite a relatively weaker US dollar globally, the Rupee remains under strain due to domestic factors. He also said the Reserve Bank of India has been intervening to curb excessive volatility but appears comfortable allowing a gradual depreciation rather than defending a specific exchange rate level.

Market experts expect the Rupee to remain volatile in the near term, with capital flows, global risk sentiment and trade-related developments playing a more decisive role than domestic economic fundamentals.