Rupee Hits All-Time Low of 90.02 as Foreign Investors Pull Out Funds

The Indian rupee slid to a record 90.02 against the US dollar on Tuesday, December 2. The currency has already dropped around 5 percent in 2025, ranking among Asia’s weakest. Traders link the slide to heavy foreign selling, a record trade deficit, and stalled India-US trade talks, which together keep demand for dollars strong.

Foreign portfolio investors have been pulling money out of Indian equities throughout 2025. Data shows FPIs have sold shares worth ₹1,47,164 crore, equal to USD 16.78 billion. This steady exit cuts dollar inflows and adds pressure on the rupee. Weak global risk appetite and worries over India’s growth outlook are often cited by market participants.

Trade deficit and Indian rupee stress against US dollar

India’s merchandise trade deficit hit a fresh peak in October, raising further questions about rupee stability. The gap widened to USD 41.68 billion, compared with USD 32.15 billion in September. Exports slipped nearly 12 percent to USD 34.38 billion. Imports, however, jumped 17 percent to USD 76.06 billion, powered by strong gold and silver buying.

The sharp rise in imports against weaker exports has increased corporate need for dollars, lifting demand in currency markets. Dealers say large shipments of precious metals are a major driver of October’s bill. The wider deficit reduces the flow of export dollars into the system, leaving the rupee more vulnerable during periods of global stress.

Another drag on the Indian rupee has been the lack of a clear trade pact with the US. High US tariffs have slowed bilateral trade and affected manufacturing orders. Exports to the US dropped nearly 9 percent, hurt by punitive 50 percent duties. An HSBC survey showed India’s manufacturing growth cooled to a nine-month low in November.

Market outlook for Indian rupee against US dollar

Analysts argue that a structured India-US trade deal could have provided some support for the rupee. Lower duties might have lifted exports and improved factory utilisation, raising foreign exchange earnings. Instead, exporters face weaker demand, while importers still require dollars, leaving the currency exposed. Many economists therefore see policy steps on trade as crucial for stability.

With these pressures building together, the rupee’s slide to 90.02 against the US dollar has alarmed policymakers. The currency’s roughly 5 percent fall in 2025 places it among the year’s worst-performing Asian units. Investors now watch data on trade, portfolio flows, and negotiations with the US for signs of relief or further strain.