Rupee Crashes Past 90-a-Dollar; Markets Jittery as India–US Trade Deal Faces Delays

Moneylife Digital Team 03 December 2025

Economy & Nation

In a landmark slump that rattled markets, the Indian rupee breached the 90-a-dollar mark for the first time on Wednesday, sinking to a new all-time low of 90.21, amid sustained foreign portfolio investment (FPI) withdrawals, costlier crude and mounting doubts over the India–US trade agreement, after briefly touching an intra-day low of 90.30.

The rupee opened weak at 89.96 against the US dollar and quickly crossed the psychological 90 threshold, touching 90.13–90.15 across multiple trading platforms. It had ended the previous session at 89.87–89.95 after enduring sharp losses since the start of the week. So far this year, the currency has fallen by over 4%, having shed around 0.8% in November alone.

Traders said the fall was driven primarily by banks steadily buying dollars at higher levels, while foreign institutional investors (FII) continued to offload Indian equities. The market’s mood has also been dampened by the continuing delay in the first tranche of the India–US bilateral trade agreement which has kept both trade and portfolio flows subdued.

Analysts noted that the missing deal has amplified concerns over export competitiveness, particularly in the face of steep US tariffs.

The rupee’s slip below the 90-mark weighed on domestic equities, with the Nifty index dropping below 26,000 and the Sensex declining nearly 200 points in early trade. The weakening currency stoked renewed fears of imported inflation and raised questions about foreign investor activity in the near term.

The situation has been exacerbated by record-high global metal and bullion prices, which have inflated India’s import bill. Import-heavy sectors, including mineral fuels, machinery, electrical equipment and gemstones, continue to absorb the impact of the stronger dollar. Meanwhile, a reportedly muted intervention from the Reserve Bank of India (RBI) has allowed the depreciation to accelerate, even as a softer dollar index and declining crude oil prices prevented an even steeper fall.

Currency experts warned that breaching the 90-a-dollar level may trigger further weakness if global conditions remain unfavourable and flows into domestic markets do not stabilise. With continued uncertainty around the trade deal and sustained strength in the US dollar, the rupee is likely to stay under pressure in the sessions ahead.

The domestic equity indices ended slightly lower on Wednesday after a volatile session amid a weakening rupee, FIIs' outflow and persistent selling in broader markets.

BSE benchmark Sensex closed at 85,106.81, down 31.46 points. The Sensex started the session flat at 85,150.64 against last day's closing of 85,138.27. NSE Nifty closed at 25,986.0, down 46.20 points or 0.18%. Nifty 50 slipped below the psychological 26,000 mark today and remained confined within a tight consolidation range of 25,875–25,950.

The broader market remained under selling pressure during the session.

Comments

User

Meenal Mamdani

2 months ago

India's economy is driven by domestic consumption, not exports.
The buyers are not the super wealthy, after all how much consumer goods, food, clothes, electronics, can the few rich families buy?
We need buyers in the lower 50% of the income range to buy enough to spur the economy and they do not feel secure enough to spend on anything besides necessities.
What can the GoI do to increase their income?