Rupee Hits Lifetime Low of 91.95, What’s Behind the Slide?

The rupee fell to an all-time low of 91.95 per dollar on January 23, with losses deepening as Indian shares came under pressure and dollar demand picked up. Importer buying and continued foreign selling dragged the currency down more than 1% over the week.

Weakness in equity markets has played a central role. Foreign investors have pulled out around $3.5 billion from Indian equities so far this month, dragging the Nifty 50 down nearly 5% in January. Selling intensified this week, with the index losing more than 3%, adding fresh strain on the rupee at a time when global dollar demand remains firm.

The benchmark index fell another 0.8% on Friday, weighed down by a selloff in Adani Group stocks after the US Securities and Exchange Commission sought court permission to email summons directly to billionaire Gautam Adani. Traders, as quoted by Reuters, said the renewed equity pressure encouraged more dollar buying across levels, deepening the rupee’s losses.

Market Pressure Builds

The rupee has now fallen more than 2% in January, adding to losses of 5% in 2025, as strong dollar demand from gold buyers and other importers continued to weigh on the currency.

Dealers, as per the report, said continued foreign selling in equities and steady dollar buying by overseas players have added to the pressure, with market mood turning cautious amid regulatory developments and corporate worries.

Anil Bhansali, head of treasury at Finrex Treasury Advisors, said Adani-related developments have triggered fresh dollar buying, with demand remaining steady at most levels due to broader market unease, Reuters report added.

Economists say capital flows remain a major vulnerability for the currency. Portfolio equity outflows hit a record $18.9 billion last year, while inflows through external commercial borrowings stayed muted. This imbalance has left the rupee exposed during periods of market stress.

Central Bank Watch

The Reserve Bank of India (RBI) has stepped in repeatedly to slow the currency’s fall, market participants said. The central bank sold dollars aggressively on at least two occasions this week, helping curb volatility.

However, traders said the intervention has only softened the pace of decline so far, without reversing the broader downward trend.