Rupee Weakens 8 Paise to 90.98 Against Dollar Amid Foreign Fund Outflows
The Indian rupee declined 8 paise to 90.98 against the US dollar in early Tuesday trade, pressured by strong dollar demand from metal importers and sustained foreign fund outflows. Foreign investors have withdrawn over $3 billion from Indian equities in January, with FIIs offloading ₹3,262.82 crores on Monday alone. Rising geopolitical uncertainty and US expansionary signals have increased global risk aversion, while domestic equity markets also declined with Sensex falling 311.33 points and Nifty dropping 99.5 points.
*this image is generated using AI for illustrative purposes only.
The Indian rupee weakened 8 paise to 90.98 against the US dollar in early trade on Tuesday, as strong dollar demand from metal importers and persistent foreign fund outflows weighed on investor sentiment. The currency's decline reflects broader pressure on emerging market currencies amid rising geopolitical uncertainty and risk aversion.
Currency Performance and Market Dynamics
At the interbank foreign exchange market, the rupee opened at 90.91 before losing ground to trade at 90.98 against the greenback. This represents an 8 paise decline from its previous close of 90.90, which itself was down 12 paise from the prior session.
| Parameter: | Value |
|---|---|
| Opening Level: | 90.91 |
| Current Trading Level: | 90.98 |
| Previous Close: | 90.90 |
| Daily Decline: | 8 paise |
| Monday's Decline: | 12 paise |
The rupee's recent performance has been concerning, with the currency trading near its record lows. On December 16, 2025, the rupee reached its lowest intra-day level of 91.14 and its lowest closing level of 90.93 against the American currency.
Foreign Investment Outflows Impact
Foreign institutional investors have significantly impacted rupee performance through sustained equity outflows. According to exchange data, FIIs offloaded equities worth ₹3,262.82 crores on Monday alone. More broadly, foreign investors have withdrawn more than $3 billion from Indian equities in January, making the rupee increasingly sensitive to dollar demand.
"Foreign investors have withdrawn more than USD 3 billion from Indian equities so far in January, and the steady outflow has made the rupee increasingly sensitive to even modest dollar demand. With capital moving out, stability becomes harder to defend," said Amit Pabari, MD of CR Forex Advisors.
Global Market Factors
Rising geopolitical uncertainty, including renewed US expansionary signals, has increased risk aversion globally. "The US Supreme Court will be giving a decision on the legality of the Trump Tariffs, which will affect the world markets directly. Presently, all the markets are in risk-off mode with Gold and Silver getting bought as safe havens," explained Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
| Global Indicator: | Performance |
|---|---|
| Dollar Index: | 98.95 (down 0.44%) |
| Brent Crude: | $64.01 per barrel (up 0.11%) |
Domestic Equity Market Performance
The sluggish domestic stock market has been triggered by the exodus of foreign capital. In early trade, both major indices declined significantly:
| Index: | Level | Change |
|---|---|---|
| Sensex: | 82,934.85 | -311.33 points |
| Nifty: | 25,486 | -99.5 points |
Technical Outlook
Pabari noted that ongoing global uncertainty, combined with a sustained break above 91.07, could pave the way for a move toward the 91.70–92.00 zone, unless offset by active intervention from the RBI. On the downside, any corrective move is likely to find initial support in the 90.30–90.50 range.
The combination of persistent foreign fund outflows, strong dollar demand from importers, and global risk-off sentiment continues to challenge the rupee's stability in the near term.
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