Indian rupee slides to record low on global market woes; lack of RBI presence worsens fall

MUMBAI: The Indian rupee plunged to a record low and suffered its biggest single-session fall in two months on Wednesday, as a global bond rout and U.S. threats to acquire Greenland kept investors on edge and amplified concerns over outflows.

The Indian rupee fell for the sixth straight session, slipping to an all-time low of 91.7425 against the dollar. It closed down 0.8% at 91.6950 against 90.9750 previous close.

The fall was exacerbated as the Reserve Bank of India stayed away from the market, and did not provide dollar supply, traders said.

The Indian rupee, the worst performing Asian on the day, is down 2% so far this month, after falling about 5% in 2025.

Many of the challenges that weighed on the rupee in 2025 remain in place. Equity outflows persist and importers are more inclined to hedge than exporters amid expectations of a further depreciation.

And while India’s current-account deficit remains manageable, the lack of capital inflows is a hurdle, leaving the currency exposed to further weakness, analysts said.

Indian equities dropped 0.3% on the day, after registering their biggest drop in over eight months on Tuesday.

Foreign investors have withdrawn about $3 billion from Indian shares in January after record outflows of nearly $19 billion in 2025.

“Flows mainly drive the USD/INR pair, thus weakness may continue to persist with interim legs of intervention expected from RBI in case of excess volatility,” said Kunal Sodhani, head of treasury at Shinhan Bank India.

India Forex Advisors said the currency will remain sensitive to corporate demand dynamics and portfolio flows.

An escalation in global risk aversion would likely reinforce outflows, increasing downside pressure on the rupee.

Lack of progress on a trade deal with the U.S. has further deprived the rupee of a potential inflow catalyst. Adding to the strain on the currency this year is weakness in most Asian peers — a factor that was largely absent in 2025.

Investors now await U.S. President Trump’s speech in Davos due later in the day.