Despite an improvement in India’s trade deficit, the Rupee failed to find support, even as several Asian peers gained or remained stable against the US dollar this year.
BY PC Bureau
December 16, 2025: The Indian rupee extended its losing streak on Tuesday, sliding to a fresh record low of 90.83 against the US dollar, weighed down by sustained foreign fund outflows, strong importer demand for dollars and lingering uncertainty over an India–US trade deal. The fall cements the rupee’s position as the worst-performing major Asian currency so far in 2025.
The domestic unit opened weaker by nearly 0.1% at 90.79, compared with Monday’s close of 90.73, and remained under pressure through the session. The subdued start followed a sharp sell-off a day earlier, when the rupee touched an all-time intra-day low of 90.80 before settling at a record closing level of 90.78 against the greenback.
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On Monday alone, the rupee had depreciated by 29 paise, extending a steady downward trend seen over recent weeks. Forex traders attributed the persistent weakness to heightened risk aversion, continued foreign institutional investor (FII) outflows and strong dollar demand from importers amid global trade uncertainty.
Concerns over the timing and outcome of a potential India–US trade agreement have further dented sentiment. Market participants say the lack of clarity has discouraged inflows at a time when emerging market currencies are already facing pressure from global macro headwinds.
#RupeeAtRecordLow | MoS Finance to #LokSabha yesterday on the decline in the Rupee
During the current FY2025-26, depreciation of Rupee influenced by increase in #tradedeficit & prospects arising from ongoing developments in India’s trade agreement with the US, amid relatively… https://t.co/52rzt3hlYD pic.twitter.com/mRC451CTUv
— CNBC-TV18 (@CNBCTV18Live) December 16, 2025
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the rupee could stabilise in the near term, pointing to an improvement in trade data. November’s trade deficit narrowed sharply to $24.53 billion, down from $41.64 billion in October. “This should take away some pressure on FIIs to sell in anticipation of further depreciation,” he told The Times of India.
The latest slide comes on top of losses seen last week. On Friday, the rupee had fallen 17 paise to close at 90.49, which was then its lowest-ever level against the US dollar. Earlier on Monday, it had opened at 90.53 in the interbank foreign exchange market before slipping further.
“The Indian rupee plunged to a record low, making it the worst performer among Asian currencies. Despite a better-than-expected trade balance, the rupee failed to find support,” said Dilip Parmar, Research Analyst at HDFC Securities, in comments to PTI.
Looking ahead, analysts remain cautious. Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee is likely to stay under pressure in the near term due to continued FII outflows and delays in trade negotiations with the US. However, he noted that a softer US dollar or intervention by the Reserve Bank of India could offer some support at lower levels.
Investors are also watching upcoming monetary policy decisions by major central banks, including the Bank of England, European Central Bank and Bank of Japan, for cues on global liquidity and currency movements. Choudhary expects the USD-INR spot rate to trade in a band of 90.30 to 91.00 in the near term.
📦 Asian Currencies vs US Dollar — 2025 Year-to-Date (% Change)
| Currency | 2025 YTD Change vs USD | Snapshot |
|---|---|---|
| Indian Rupee (INR) | ≈ −6% | Sharp depreciation; record lows driven by FII outflows, trade uncertainty and importer dollar demand |
| Bangladeshi Taka (BDT) | ≈ −2% to −4% | Gradual weakening amid FX shortages and managed depreciation |
| Pakistani Rupee (PKR) | ≈ −1.5% to −2% | Volatile but relatively contained moves under IMF-linked reforms |
| Chinese Yuan (CNY) | Flat to mildly weaker | Tightly managed; authorities limited excessive volatility |
| Japanese Yen (JPY) | Slightly weaker | Safe-haven flows offset by policy uncertainty |
| South Korean Won (KRW) | Modest weakening | Pressured by risk-off sentiment and capital outflows |
| Malaysian Ringgit (MYR) | +6% to +8% | One of Asia’s strongest performers; commodity support |
| Thai Baht (THB) | ≈ +5% | Backed by tourism recovery and portfolio inflows |
| Taiwan Dollar (TWD) | ≈ +5% | Supported by strong exports and steady inflows |
| Singapore Dollar (SGD) | +3% to +4% | Resilient under MAS’s policy framework |
