Indian Rupee Falls to Record Low of ₹90 Against US Dollar as Trade Deal With US Gets Delayed:

The Indian rupee continued to weaken on Wednesday, December 3, touching a new record low amid ongoing delays in finalising a trade deal between India and the United States. The currency slipped to ₹90.13 per US Dollar on Wednesday morning, crossing its previous all-time low of ₹89.9475, which it had recorded just a day earlier on Tuesday. As of 8:04 AM UTC, the rupee was trading even lower at ₹90.26 against one dollar. This sharp fall has added to concerns in financial markets, especially because the rupee has already been labelled as one of the worst-performing major currencies of 2025 by AFP. According to analysts, the main reason behind the decline is the uncertainty surrounding the much-discussed India-US trade deal, which is still stuck with no clear progress. Dilip Parmar, an analyst at HDFC Securities, explained that the fall in the rupee is driven “first and foremost” by an imbalance between demand and supply in the foreign exchange market. Foreign funds are flowing out of India, while the delay in the trade agreement is adding pressure on the currency. Parmar noted that these factors together have made it difficult for the rupee to stabilise. Another important issue, analysts say, is the limited intervention by the Reserve Bank of India (RBI). In the past, the central bank has actively supported the rupee by selling dollars aggressively whenever the currency approached key levels. However, this year, the RBI has intervened only occasionally. According to experts quoted by AFP, the central bank appears more willing to allow the rupee to move freely instead of defending it at any cost. Raj Gaikar, a research analyst at SAMCO Securities, said that the RBI’s priorities have changed. Since inflation is much lower than earlier expected, the focus has shifted to supporting economic growth rather than spending large foreign exchange reserves to keep the rupee’s value artificially high. HSBC’s Head of Asia FX Research, Joey Chew, told Reuters that the delay in the trade agreement is a major reason for the rupee’s weakness. She explained that each day without progress increases foreign exchange demand due to India’s trade deficit and capital outflows, while the supply of dollars remains inconsistent. Chew also pointed out that foreign investors are getting impatient. Although India saw good foreign inflows in October, the lack of fresh updates on the trade deal has caused these flows to flatten out again. Despite the rising concerns, India’s Chief Economic Adviser V. Anantha Nageswaran has reassured the public that the fall in the rupee is not a major cause for worry. Speaking at a press conference on Wednesday, he said that the weaker rupee is unlikely to affect India’s inflation or its export performance. Nageswaran also expressed optimism about the ongoing tariff issues between India and the United States. He said that Washington may soon remove the additional 25% tariff imposed on some Indian goods. He added that he is confident the issue will be resolved within the next few months, if not sooner. According to him, India’s reciprocal 25% tariff may also be reduced to earlier expected levels of 10% to 15%. As India waits for progress on the trade deal, the markets will be closely watching both the rupee’s movement and upcoming announcements from New Delhi and Washington.

NEWS