Indian rupee depreciated against the US dollar on Wednesday as persistent capital outflows from foreign investors, alongside heightened dollar demand from importers, making it one of the worst-performing Asian currencies. Foreign institutional investors offloaded equities worth Rs 3,844.02 crore on Tuesday, according to exchange data. Traders overlooked Reserve Bank of India’s statement that it will conduct an auction of open market operations purchase of government securities worth Rs 50,000 crore on January 5, 2026, to inject liquidity in the system. On the global front, New Zealand dollar weakened against other major currencies in the Asian session on Wednesday amid risk-off mood, with several markets in the Asia-Pacific region closed for New Year's Eve.

Finally, the rupee ended at 89.91 (Provisional), depreciated by 16 paise from its previous close of 89.75 on Tuesday. The currency touched a high and low of 89.95 and 89.84 respectively.