The Indian rupee just hit a grim milestone, crashing past the 91-mark for the first time ever. And then it settled at a record low of 91.01 against the US dollar this Tuesday. During a chaotic session, the currency actually touched an intraday low of 91.14 before some late-session recovery.
The thing is, even crashing oil prices couldn’t save it. Usually, cheaper crude helps the rupee, but right now, global investors are in “panic mode” over the stalled India-US trade deal.
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The Perfect Storm: Trade and Outflows
The government had to answer for the slide in the Rajya Sabha. Minister of State for Finance Pankaj Chaudhary basically admitted that the “likely prospects” of the US trade agreement are weighing heavy on the currency.
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FPI Exodus: Foreign investors are dumping Indian assets like they’re on fire. We’ve seen nearly 2.7 billion in outflows in early December alone. Total equity selling for 2025 is already nearing ₹1.6 lakh crore.
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The Trade Gap: While November exports actually bounced back by $19\%$, the trade deficit is still massive.
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The “Export Boost” Argument: The government claims a weaker rupee helps our exports stay competitive. But here’s the kicker: experts from think tanks like GTRI say that’s mostly talk. They argue that high input costs and logistics bottlenecks mean the weaker currency just makes our imports (like electronics and gold) way more expensive without actually helping us sell more abroad.
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Where Does it End?
Let’s be real, market watchers are already looking at the 92 level. The RBI seems to be letting the market find its own bottom for now, only stepping in to stop the most “wild” swings. With US bond yields rising and trade war uncertainty lingering, the path of least resistance for the rupee is currently down. It’s an ongoing headache for importers and anyone planning to study or travel abroad this winter, or nothing.
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