Indian rupee closed at a fresh record low on Wednesday, after hitting its lowest level against the US dollar in intraday trade on Wednesday, as escalating global trade war raised risk-aversion and kept emerging market currencies under pressure.
The rupee depreciated to an all-time low of 91.74 against the US dollar. At the interbank foreign exchange, the rupee opened at 91.05 and depreciated to 91.74 against the greenback, down 0.85% from its previous close. Meanwhile, it settled the day at a fresh closing low of 91.69, down 0.80%.
On Tuesday, the rupee declined 7 paise to close at 90.97 against the US dollar.
Global geopolitical uncertainty increased after US President Donald Trump’s push over Greenland raised concerns over the potential for a US–Europe trade dispute. Weakness in the Indian stock market and persistent outflow of foreign capital also pressurized rupee.
The dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.05 per cent lower at 98.59.
“Markets were already uneasy when US President Donald Trump revived trade war rhetoric and renewed his push for Greenland. US Treasury yields jumped to four-month highs, while the dollar slipped for a second day - a sign that investors are questioning not just risk, but direction,” said Amit Pabari, MD, CR Forex Advisors.
Akshat Garg, Head - Research & Product of Choice Wealth, said that the rupee fall reflects a combination of global risk aversion and sustained dollar demand rather than any single domestic shock.
"Persistent foreign fund outflows, elevated import requirements—especially energy—and a stronger dollar globally have tightened pressure on the currency. While exporters may benefit from improved competitiveness, a weaker rupee gradually feeds into higher costs for fuel, travel and imported goods, impacting households and businesses alike. The key challenge for policymakers is to manage volatility without overreacting. With adequate forex buffers and calibrated intervention, the move appears more sentiment-driven than a signal of structural weakness," he added.
Meanwhile, the Indian stock market extended losses, following weakness in global equities amid rising geopolitical tensions. The Sensex fell 271 points, or 0.33%, to end at 81,909.63, while the Nifty 50 settled at 25,157.50, down 75 points, or 0.30%. The BSE Midcap and Smallcap indices lost 1% and 0.80%, respectively.
Crude oil prices traded lower. Brent crude, the global oil benchmark, declined 1.14% to $64.18 per barrel in futures trade.
Foreign institutional investors offloaded equities worth ₹2,938.33 crore on Tuesday, according to data on the BSE.
Rupee Outlook
According to Amit Pabari, MD, CR Forex Advisors, uncertainty remains the dominant force for now.
“Persistent global unease, coupled with a sustained break above 91.07, could gradually open the door toward the 91.70 – 92.00 zone, unless restrained by active intervention from the RBI. On the downside, any corrective pullback is likely to find its first line of support in the 90.30 – 90.50 range,” Pabari said.
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