The Indian rupee fell to a record low on December 2, closing at 89.5475, pressured by maturing NDF positions and ongoing U.S. trade tensions. RBI interventions helped it stay above 90. Weak exports and high tariffs may further weaken the currency, while reserves remain at USD 688.1 billion.
The Indian rupee fell to a historic low on December 2, weighed down by maturing non-deliverable forward (NDF) positions and ongoing uncertainty over trade relations with the United States. During the session, the rupee touched a low of 89.7575 before closing at 89.5475, down 0.1%.
Factors Pressuring the Rupee
Despite India’s position as the fastest-growing major economy, the rupee has faced sustained pressure in 2025 due to weak trade and investment flows. Traders noted that the settlement of large positions in the NDF market on Monday contributed significantly to the currency’s slide.
Intervention by the Reserve Bank of India (RBI) through dollar-selling operations helped the rupee stay above the psychologically critical 90 level. Data released after market hours on Friday showed that the RBI’s short forward dollar positions rose to USD 63.6 billion in October, reflecting the central bank’s active efforts to support the currency.
Trade Tensions and Future Outlook
High tariffs on Indian exports remain a key concern. ANZ warned that slowing goods export growth, combined with persistent high tariffs, could strain India’s growth, current account, and balance of payments, potentially leading to further depreciation of the rupee.
According to ANZ forecasts, if the current tariff structure (up to 50%) persists, the rupee may weaken to 91.30 by the end of 2026. Conversely, a trade agreement reducing tariffs to 15–20% could trigger a rebound to 88–88.50, although the RBI might intervene to moderate gains and maintain foreign exchange reserves.
Global and Regional Impact
India’s foreign exchange reserves stood at USD 688.1 billion as of November 21. The rupee also fell to an all-time low of 12.69 against the offshore Chinese yuan. While the dollar index slipped slightly, other Asian currencies showed mixed performance, highlighting ongoing volatility in the region.
Overall, the rupee’s recent decline underscores the interplay of domestic monetary measures, global trade dynamics, and investor positioning, signalling a challenging environment for India’s currency in the near term.
