The Indian rupee depreciated 7 paise to close at a record low of 90.97 against the US dollar on Tuesday, marking another milestone in the currency's ongoing weakness. Strong dollar demand from metal importers and persistent foreign fund outflows dented investor sentiment, pushing the local unit to new lows.

Currency Performance and Trading Range

At the interbank foreign exchange market, the rupee opened at 90.91 and lost ground throughout the session. The currency touched an intraday low of 91.06 before recovering to close at 90.97 against the American currency.

On Monday, the rupee had depreciated by 12 paise to close at 90.90 against the greenback. The currency's previous lowest closing level was 90.93, recorded on December 16, 2025, when it also reached an intraday low of 91.14.

Market Pressures and Analysis

Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, noted that the Indian rupee traded with a negative bias and slipped below the 91-mark due to risk aversion in global markets and persistent foreign institutional investor outflows. However, he highlighted that a weak dollar and intervention by the RBI prevented a sharp fall.

Forex traders attributed the rupee's weakness to several factors:

• Rising geopolitical uncertainties, including renewed US expansionary signals
• Increased risk aversion keeping emerging market currencies under pressure
• Sluggish domestic stock market triggered by foreign capital exodus
• Strong dollar demand from metal importers

Global Market Context

The dollar index, which measures the greenback's strength against a basket of six currencies, was trading 0.91% lower at 98.48. Despite this weakness in the dollar, the rupee continued to face pressure from domestic factors.

Brent crude, the global oil benchmark, was trading at $63.94 per barrel in futures trade, providing some context for commodity market movements.

Domestic Equity Market Impact

The domestic equity market reflected the broader risk-off sentiment, with significant declines across major indices:

Foreign institutional investors continued their selling spree, offloading equities worth ₹3,262.82 crore on Monday, according to exchange data.

Outlook and Expectations

Choudhary expects the rupee to continue trading with a negative bias due to foreign fund outflows and risk aversion in global markets, particularly over the US stance on Greenland. Uncertainty over trade deal talks may also pressure the rupee further. However, he noted that a weak dollar and any RBI intervention may provide support at lower levels, with the USD-INR spot price expected to trade in a range of 90.70 to 91.25.

The Indian rupee continued its downward trajectory on Tuesday, weakening to 91.03 per dollar and crossing the psychologically important 91-mark. This decline reflects ongoing pressure from foreign portfolio investor selling and renewed concerns over global trade tensions that have weighed heavily on market sentiment.

Currency Performance Details

The rupee's movement past the 91-per-dollar level represents a significant psychological barrier being breached. The specific exchange rate data shows the currency's vulnerability to external factors.

Market Pressures

The domestic currency faced dual pressures that contributed to its weakness. Foreign portfolio investor selling activity has remained persistent, creating sustained downward pressure on the rupee. Additionally, renewed global trade tensions have added to the challenging environment, further eroding investor confidence and market sentiment.

The combination of these factors has created a challenging backdrop for the Indian currency, with the breach of the 91-level marking a notable development in the rupee's recent performance against the dollar.