Indian Rupee Shows Signs of Stabilising After Hitting 90 Against USD

After breaching the psychological 90-per-dollar mark earlier this month, the Indian rupee is showing early signs of stabilisation, giving hope that the worst of its decline may be behind.

According to a market report by Invesco Mutual Fund, the rupee’s recent recovery points to a possible easing of pressure, although experts caution it’s too soon to call a clear trend. The currency had fallen about 5.2% this year, making it the weakest major Asian currency in 2025. At the time of reporting, the rupee was trading around Rs 89.94 against the US dollar.

Despite the sharp decline, India’s economic fundamentals remain strong. Lower oil prices, cooling inflation, and surprisingly robust GDP growth have provided some relief. Experts say the rupee’s weakness is largely driven by external factors, including foreign investor outflows, a widening trade deficit, and global market uncertainties.

The report notes that over Rs 1.55 lakh crore was withdrawn from Indian equities by foreign investors this year, while imports surged and exports dropped in October. Concerns around the Indo-US trade deal and US tariff actions also affected market sentiment.

However, after hitting record lows, the rupee staged a modest recovery in the third week of December, appreciating to around Rs 89.57 per dollar. Analysts attribute the rebound to easing dollar strength, improved investor confidence, and intervention measures by the Reserve Bank of India, which injected liquidity to smooth out volatility.

Looking ahead, the rupee’s performance will depend on global market trends, foreign investment flows, and clarity on trade negotiations. Analysts stress that while crossing the 90 mark grabbed headlines, it does not signal an economic crisis. India’s strong fundamentals, forex reserves, and policy tools suggest a path of gradual stabilisation rather than further sharp falls.

Also Read: RBI Expected to Inject Fresh Liquidity as Rupee Pressures Persist