India’s currency markets witnessed a historic jolt on Wednesday as the rupee, under relentless pressure from overseas dollar demand and persistent foreign investor withdrawals, slipped past the 90-per-dollar mark for the first time ever. The slide triggered fresh concerns about inflation, import bills and the broader economic outlook.
The rupee opened at 89.96 in early trade but quickly sank to a new lifetime low of 90.15 before stabilising slightly around 90.02. Dealers said aggressive dollar purchases by major banks, largely on behalf of importers and corporates hedging risk, pushed the currency into uncharted territory despite a relatively softer dollar index globally.
Traders noted that government and RBI positioning in recent days suggested a willingness to allow a gradual weakening to support struggling exporters. “State-run banks continued buying dollars at elevated levels through Tuesday and late into after-hours deals,” a senior Mumbai-based treasury official said, adding that the trend signalled strong corporate demand combined with thin RBI intervention.
The fall has been compounded by stalled India–US trade negotiations and heavy foreign portfolio investor (FPI) exits from equities. FPIs offloaded nearly ₹3,642 crore worth of stocks on Tuesday alone, deepening downside pressure on the currency. Analysts warn that if outflows persist, the rupee could drift toward 91 in the coming weeks, particularly if policy support thins near the 90 level.
Markets are now watching the RBI’s Monetary Policy Committee (MPC) meeting, which began Wednesday, with the rate decision due on December 5. Experts caution that any surprise rate cut could trigger further rupee selling ahead of the US Federal Reserve’s decision on December 10.
Global cues offered limited relief: the dollar index edged down 0.13% to 99.22, while Brent crude hovered near USD 62.43 per barrel — a positive development for India’s oil bill. However, domestic equities opened weaker, with the Sensex slipping 165 points to 84,972 and the Nifty falling 78 points to trade at 25,954.
