The Indian Rupee (INR) is currently facing significant pressures, having reached a record low of 90.42 per U.S. dollar on December 4, 2025. This represents a 5% depreciation over the last year, driven by a multitude of factors including a widening trade deficit and increased tariffs on Indian exports to the U.S. Analysts indicate that a 50% increase in these tariffs has escalated demand for foreign currency, further straining the rupee.
Foreign investment has also been a critical factor in the rupee's decline, with reports indicating that withdrawals of nearly $17 billion from Indian equities this year have intensified the currency's downtrend. The Reserve Bank of India (RBI) has acknowledged these challenges, shifting its policy stance to tolerate a weaker rupee in light of declining dollar inflows and a focus on stabilizing the economy rather than fixing a specific exchange rate.
Recent forecasts from India's largest private lender suggest that in the absence of a swift trade deal with the U.S., the rupee could plummet to 92 against the dollar. Market sentiment remains negative, with forward premiums surging amidst a prevailing weakening bias.
Current exchange rates signify considerable volatility. The INR to USD is trading near 90-day lows at approximately 0.011016, which is 2.1% below its 3-month average. Similarly, the INR to EUR is at a low of 0.009371, reflecting a 3.0% dip below its average, while the INR to GBP is at 0.008232, also 2.6% below its average. The INR to JPY shows slight resilience, trading at 60-day lows near 1.7069, only 0.7% below its average. These movements indicate a relatively stable range of trading but highlight the broader downward trend affecting the rupee across multiple currency pairs.
Overall, market conditions suggest that individuals and businesses engaged in international transactions should remain alert to fluctuations and consider timing their exchanges to mitigate the effects of the depreciating rupee.
