Mumbai

The Indian rupee continued its downward spiral on Wednesday, touching a fresh intra-day low of 90.25 against the US dollar — a fall of 29 paise from the previous close — as persistent foreign fund outflows and aggressive dollar buying by banks weighed on sentiment.

Currency dealers said weak domestic equities and the lack of progress on the long-anticipated India-US trade agreement further dampened market confidence, adding to pressure on the local currency.

At the interbank forex market, the rupee opened at 89.96 to the dollar and slipped to 90.25 during the day — the lowest level ever recorded in intra-day trade.

On Tuesday, the domestic unit had ended at a record closing low of 89.96 per dollar, down 43 paise, dragged by sustained importer demand for the greenback and continued short-covering by speculators.

Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said the fall below the 90-mark reflects heightened concerns over the extended delay in finalising the India-US trade pact. “Markets now want concrete numbers rather than broad assurances, leading to accelerated selling in the rupee over the past few weeks,” he said.

He added that soaring metal and bullion prices have worsened India’s import bill, while high US tariffs continue to restrict export competitiveness.

According to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, the government and the Reserve Bank of India appear inclined toward supporting exporters, which may have contributed to the rupee’s weakness. “Nationalised banks purchased dollars at higher levels consistently on Tuesday,” he noted.

The Monetary Policy Committee meeting began on Wednesday, with the RBI’s interest rate announcement scheduled for December 5, ahead of the US Federal Reserve’s rate decision on December 10. Bhansali cautioned that a rate cut by the central bank could trigger additional selling pressure on the rupee.

In global markets, the dollar index — which measures the US currency against six major counterparts — was down 0.18 per cent at 99.17. Brent crude futures were marginally lower at USD 62.43 a barrel, declining 0.03 per cent.

Meanwhile, domestic equities traded in the red. The Sensex slipped 277.23 points, or 0.33 per cent, to 84,861.04 in intra-day trade, while the Nifty was down 111.70 points, or 0.43 per cent, at 25,920.50.

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Foreign Institutional Investors offloaded equities worth Rs 3,642.30 crore on Tuesday, according to exchange data.