The Indian rupee dropped to a new all-time low of 89.76 per US dollar on December 1, even as the country posted an impressive 8.2% GDP growth for the July–September quarter.
The strong economic data lifted stocks to record highs and nudged the 10-year government bond yield up to 6.553%, near a one-week high. However, the growth did little to support the currency.
Since November 3, the currency has fallen nearly one full rupee against the dollar and is now one of the worst-performing major currencies of 2025, ahead of only the Turkish lira and Argentine peso.
Foreign investor sentiment remains weak. Overseas investors sold about $400 million worth of Indian equities on Friday, taking total outflows this year to more than $16 billion. Traders also said that the maturity of large positions in the non-deliverable forwards market added pressure on the rupee.
Meanwhile, data released on Friday showed the RBI’s forward book rising above $63 billion in October, indicating continued efforts to manage volatility, with state-run banks seen offering dollars intermittently. The maturity of large positions in the non-deliverable forwards (NDF) market also weighed on the currency, according to traders.
The rupee remains weighed down by the lack of progress on a US–India trade deal, higher importer demand for dollars and a balance-of-payments position that has turned less supportive.
Hopes for tariff relief faded after no concrete agreement emerged on reducing the steep 50% tariffs imposed on Indian exports.
India’s external sector continues to face pressure, with the merchandise trade deficit hitting an all-time high in October, further dampening sentiment and adding to downward pressure on the rupee.
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