Indian Rupee Hits Record Low on December 16 Amid Dollar Strength and Outflows

The Indian rupee weakened to a fresh all-time low for the fourth consecutive session on December 16, 2025, pressured by strong dollar demand and persistent foreign portfolio outflows. The currency slipped past 91 per dollar, breaching its previous record low of 90.7875 set on December 15, 2025.

So far this year, the rupee has declined 6% against the dollar, making it one of the worst-performing emerging market currencies. The fall coincides with steep U.S. tariffs on Indian exports and subdued foreign inflows, adding to pressure on domestic markets.

Rupee Breaches 91 Per Dollar for First Time

The rupee’s slide accelerated on December 16, 2025, as it crossed the 91 mark against the U.S. dollar. This marks the fourth consecutive session of record lows, reflecting sustained demand for dollars and weakness in emerging market currencies.

The previous record of 90.7875 was set just a day earlier, underscoring the pace of depreciation. Benchmark equity indices also traded lower by about 0.4% in early deals, mirroring currency market stress.

Factors Driving Currency Weakness

The decline in the rupee has been driven by strong dollar demand and continued foreign portfolio outflows. Foreign investors have sold more than $18 billion worth of Indian equities so far this year, putting annual outflows on track for a record high.

The impact of steep U.S. tariffs on Indian exports has further weighed on sentiment, while maturity of positions in the non-deliverable forwards market added to pressure. Dollar sales by state-run banks, likely on behalf of the Reserve Bank of India, helped limit losses but could not reverse the trend.

Trade Performance Offers Partial Relief

Despite currency weakness, India’s trade performance showed improvement in November. Exports to the U.S. rose 21% year-on-year, helping narrow the merchandise trade deficit to a five-month low of $24.53 billion.

This rebound, coupled with resilient economic growth, has eased immediate pressure on New Delhi to conclude a trade agreement with Washington. However, the benefits of stronger exports have not been sufficient to offset the impact of foreign portfolio outflows and dollar strength.

Read More: RBI to Infuse Liquidity with $5 billion USD/INR Buy–Sell Swap and OMO Worth ₹1 Lakh Crore.

Conclusion

The rupee’s fall to 91 per dollar on December 16, 2025, underscores persistent headwinds from global and domestic factors. Strong dollar demand, record foreign outflows, and trade-related pressures have combined to push the currency to successive lows. While export growth and RBI interventions have offered some relief, volatility in currency and equity markets is likely to remain elevated in the near term.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.