Mumbai

The Indian rupee suffered a sharp fall on Wednesday, tumbling 67 paise to end at a record low of 91.64 (provisional) against the US dollar, weighed down by sustained foreign fund outflows and rising risk aversion in global financial markets.

Forex traders said the domestic currency has now declined about 1.5 per cent so far this month, with the latest slide driven by heightened geopolitical tensions and weak investor sentiment. The rupee had previously touched its lowest-ever level of 91.14 on December 16, 2025.

In early trade at the interbank foreign exchange market, the rupee opened at 91.05 against the dollar but steadily weakened through the session, hitting an intraday low of 91.74 before settling at the historic closing low.

According to Dilip Parmar, Research Analyst at HDFC Securities, Wednesday’s fall marked the steepest single-day decline for the rupee since November 21, 2025.

The local unit had closed at 90.97 against the US currency on Tuesday, after losing 7 paise.

Market participants attributed the pressure on the rupee to ongoing geopolitical developments, including rising friction between the US and Europe over Greenland-related issues and tariff threats, along with broader concerns over US involvement in Venezuela’s oil sector. These developments, coupled with a weak trend in domestic equities, have dampened risk appetite, traders said.

“Emerging economies such as India are experiencing stress due to volatile capital flows,” said Abhishek Bisen, Head of Fixed Income at Kotak Mahindra Asset Management Company. He added that uncertainty surrounding global trade and geopolitics has had a cascading effect on currencies.

Bisen noted that for India, progress on a proposed trade agreement with the United States could help stabilise sentiment and support the rupee. “Until geopolitical risks subside and the trade deal takes shape, the currency is likely to remain exposed to external shocks,” he said, adding that India’s strong foreign exchange reserves provide the Reserve Bank of India with adequate tools to manage volatility.

He also pointed out that the rupee’s depreciation has made the currency more competitive on a real effective exchange rate basis, which could support export growth.

Meanwhile, the dollar index, which tracks the US currency against six major global peers, was marginally lower by 0.02 per cent at 98.61. Brent crude oil prices declined 1.88 per cent to USD 63.70 per barrel in futures trade.

Parmar said the speed of the rupee’s decline has been particularly sharp, limiting the effectiveness of intermittent central bank interventions in arresting the fall.

On the domestic equities front, the BSE Sensex ended the day down 270.84 points at 81,909.63, while the NSE Nifty slipped 75 points to close at 25,157.50.

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Foreign institutional investors continued to pare their exposure to Indian equities, selling shares worth Rs 2,938.33 crore on Tuesday, according to stock exchange data.