Rupee plunges to record low of 91.65 against US dollar

The rupee slumped to a fresh all-time low of 91.65 against the US dollar in early trade on Wednesday, extending its recent losing streak as strong demand for the greenback, a cautious global mood and sustained foreign fund outflows kept the domestic unit under pressure.

At the interbank foreign exchange market, the rupee opened weaker and slipped further as trading progressed. The currency had already closed at a record low of 90.97 in the previous session, reflecting sustained weakness across emerging market currencies amid heightened risk aversion.

Forex traders said multiple global and domestic factors are contributing to the depreciation. Global sentiment has turned cautious due to rising geopolitical uncertainties, renewed trade-war rhetoric from the US and elevated US Treasury yields, which typically push investors towards safe-haven assets and strengthen the dollar. On the domestic front, steady dollar demand from importers , coupled with continued portfolio outflows and weak equities, has intensified pressure on the rupee.

Foreign institutional investors remained net sellers, offloading equities worth ₹2,938.33 crore on Tuesday, as per exchange data. Domestic benchmark indices also opened in the red, with the Sensex falling 385.82 points to 81,794.65 and the Nifty declining 91.5 points to 25,141 , adding to the cautious mood.

Market participants said the Reserve Bank of India (RBI) is likely stepping in to prevent sharp, disorderly moves in the currency. The central bank typically intervenes by selling dollars through state-run banks and deploying liquidity management tools to curb speculative pressure, aiming to smooth volatility rather than defend a particular exchange rate.

The rupee’s sharp fall is expected to have a direct impact on the economy through higher import costs. A weaker currency makes imports particularly crude oil, fertilisers, electronics and industrial raw materials more expensive, raising input costs for companies and potentially adding to inflationary pressures. While exporters may benefit from better rupee realisations, analysts warn that sustained depreciation can widen the trade deficit and complicate inflation management.

Meanwhile, the dollar index, a measure of the US currency against a basket of six major currencies, was marginally lower at 98.59 , while Brent crude slipped 1.11 per cent to USD 64.20 per barrel , offering limited relief as currency weakness offset part of the gain from softer oil prices.

With global cues volatile and capital flows uncertain, dealers said currency markets will remain sensitive to risk sentiment, importer demand and the RBI’s intervention strategy in the coming sessions.