Rupee sinks to a new low of 90.48/dollar

The Indian currency closed about 52 paise down against previous close of 89.9650 per US dollar. On Thursday, INR surpassed the previous week’s record low of 90.43 per dollar

On Thursday, the rupee plummeted to an unprecedented low of 90.4825 against the US dollar, pressured by stalled tariff negotiations between India and the US alongside heightened importer dollar requirements.

The currency weakened by approximately 52 paise from Wednesday’s closing rate of 89.9650, breaching the prior week’s historic low of 90.43 recorded on Thursday.

The session witnessed its lowest point at 90.4825 during closing hours, while intraday trading saw the rupee peak at 89.96.

Vikram Kasat of PL Capital attributed this decline to robust dollar strength and continuous foreign capital withdrawals, sustaining downward momentum on the domestic currency.

Market movements are expected to remain influenced by international trends, currency fluctuations, and investment flows in the immediate future, he noted, as Federal Reserve rate adjustments become priced into markets and local catalysts remain sparse.

A research note from Emkay Global Financial Services highlighted ongoing currency volatility: “Economic stability concerns stemming from forex pressures will likely persist through Q1 2026.” The brokerage suggested a bilateral trade agreement could potentially ease pressure on the rupee.

Corporate Sector Implications

Fitch Ratings indicated that most rated Indian companies benefit from natural currency hedges or maintain extensive hedging coverage against foreign currency liabilities.

However, the agency cautioned that companies in sectors highly exposed to rupee devaluation—lacking adequate risk mitigation—could face negative rating actions.

Industries like renewables, power utilities, and toll roads were identified as particularly vulnerable due to rupee-denominated revenues and limited natural hedging mechanisms.

Fitch emphasized that entities with full hedging via financial instruments or sub-20% foreign debt exposure would remain insulated from rating impacts. This includes complete coverage of principal and interest payments through hedges.

For partially hedged firms—those guarding coupon payments but exposed to principal repayment risks beyond specific exchange rate thresholds—structural safeguards such as parental guarantees, built-in liquidity reserves, and cash-trap mechanisms should prevent material rating deterioration.

The agency maintains its baseline projection of INR87 per USD by end-2026, stating limited rating sensitivity exists around current exchange levels of approximately INR90 per USD.

Published on December 11, 2025