Rupee's Record Plunge: The data behind the currency's historic 2025 slide

The rupee hit an all-time low due to a strong US dollar, widening trade deficit and capital outflows

Dec 18, 2025, 12:03 IST1 min

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The rupee breached the 90-mark and hit a lifetime low against the US dollar on December 3. After starting the year around the 85.7-mark in January, the rupee has consistently weakened.

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While currencies across Asia are also under pressure from a strong dollar, the rupee’s decline is significantly steeper.

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The crisis is being amplified by the strength of the US dollar, which crossed over 100 in November, showing global demand for the greenback.

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Foreign investors have aggressively withdrawn funds from Indian equities.

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Uncertainty over the pending India-US trade deal and the ongoing negative effects of US tariffs on Indian goods pushed up the October trade deficit to the highest this year.

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The current account deficit has widened in the September quarter.

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Forex reserves have also dipped in October.

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Meanwhile, a long stretch of undervaluation continues, with the rupee’s Real Effective Exchange Rate being under 100 since February, which is unusual.