The rupee slipped to a new all-time low on January 23, ending the session at 91.93 per US dollar (provisional), as strong dollar demand, sustained foreign fund outflows and global uncertainties weighed on the currency.
In intraday trade, the rupee weakened to 91.99, breaking past the previous record low of 91.7425 touched on Wednesday. From Thursday’s close of 91.41, the domestic currency fell 0.63 percent in a single session.
Market participants said demand for the US dollar from corporates and importers remained strong, while continued selling by foreign portfolio investors added to the pressure. Lingering geopolitical tensions also pushed investors towards the dollar as a safe haven.
Forex traders said the Reserve Bank of India is intervening in the market to smooth volatility, but these steps have not been sufficient to reverse the broader negative trend in the rupee.
Foreign investor outflows remain a key concern for the currency. According to NSDL data, foreign portfolio investors have sold Indian equities worth ₹31,334 crore so far in January, the highest monthly outflow since August last year.
The sustained selling has also hit equity markets. The Nifty 50 index has fallen about 4 percent so far this month. On Friday, the BSE Sensex dropped 770 points, or 0.94 percent, to close at 81,537, while the Nifty 50 ended 241 points, or 0.95 percent, lower at 25,049.
The rupee has fallen more than 2 percent so far in January, adding to its nearly 5 percent decline in 2025. On a weekly basis, the currency has lost about 1.2 percent, its steepest fall in six months, according to Reuters data.
While India’s domestic macro fundamentals remain relatively stable, elevated global uncertainties continue to weigh on sentiment. Analysts point to concerns over US trade tariff actions and geopolitical tensions involving Greenland, Venezuela and the Russia-Ukraine conflict.
Analysts said the rupee is likely to remain under pressure in the near term, with a weak trading range of 91.35 to 92.25.
A weaker rupee may support exporters by improving competitiveness, but it also gradually raises costs for fuel, travel and imported goods, affecting households and businesses. But the key challenge for policymakers is to manage volatility without overreacting. With adequate foreign exchange buffers and calibrated intervention by the RBI, the current move appears driven more by sentiment than by any structural weakness in the economy.