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The Indian Rupee Has Declined 4.9% so far This Year, Making it Asia’s Worst-Performing Currency
The Indian rupee slipped past the 90-per-dollar mark for the first time as the prolonged India-US trade deal impasse intensified pressure on currency markets. This prompts renewed debate on India’s economic outlook.
Rupee Breaches 90
The Indian Rupee weakened past the crucial 90 per US dollar mark, as delays over an India-US trade deal weighed on sentiment. The rupee weakened to a low of 90.13 per US dollar on Wednesday (December 3, 2025).
The previous lowest value was 89.9475, which was hit on Tuesday (December 2, 2025). It was down 0.3% on the day. The lack of forceful intervention by the Reserve Bank of India (RBI) and persistent foreign outflows were key factors contributing to the loss, according to analysts.
Key Factors behind Rupee’s Fall
A 50% tariff on Indian goods has weighed on exporters, while strong imports have kept dollar demand high and added pressure on the rupee. Together, these factors have played crucial roles in widening the country’s current-account deficit in the September quarter.
Sustained weakness risks deterring foreign investors, who have pulled $16 billion from local shares this year, and could stoke inflation in the fuel-importing nation.
India's Trade Deficit
FPIs have offloaded shares worth Rs. 4,335 crore in just two trading sessions of December. This took the year-to-date outflows to Rs. 148,010 crore.
India's trade deficit has swelled to a record $41.7 billion in October 2025. This widening deficit was driven largely by a dramatic surge in gold imports, which nearly tripled to $14.7 billion, and a sharp 28% decline in exports to the US to $6.3 billion in October versus May.
Sensex, Nifty Decline
The Indian benchmark indices also came under pressure, stepping further away from all-time highs hit earlier this week. The Nifty 50 slipped below 26,000, and the Sensex shed nearly 200 points.
The Real Concern
“A real concern now, which has contributed to the slow drifting down of the market, is the continued depreciation in the rupee and fears of further depreciation since the RBI is not intervening to support the rupee,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
“This concern is forcing the FIIs to sell despite the improving fundamentals of rising corporate earnings and strong rebound in GDP growth,” he added.
“A lot, however, will depend on the details of the tariffs to be imposed on India as part of the deal,” the Geojit analyst added.
Words from Experts
“Exporters are not selling dollars aggressively since the rupee is depreciating, while the dollar demand from importers remains high,” Ritesh Bhansali, deputy chief executive officer at Mecklai Financial Services, told reporters.
According to Barclays, “Only an India-US trade deal is likely to provide near-term respite to the rupee.”
HDFC Securities said, “For now, with the key 90 mark breached, the currency could slip further to 90.30 in the coming days.”
According to experts, the rupee depreciation will halt and even reverse when the India-US trade deal materialises, which is likely this month.
The Great Fall of the Rupee
The rupee has fallen 5% so far in 2025, which makes it the worst-performing Asian currency this year.
India is still among the few major economies yet to seal a trade pact with the US, though officials remain optimistic about wrapping one up soon. Whether policymakers step in with course-correcting measures and whether Washington and New Delhi can break the deadlock will now determine how long this pressure lasts.