Indian Rupee Slides to One-Month Low as Stock Outflows Rise

The Indian rupee fell to a one-month low amid persistent foreign outflows from domestic equities and muted central bank support.

The currency weakened as much as 0.6% to 90.8438 per dollar, its lowest level since Dec. 17. Foreign investors have pulled $1.6 billion from Indian equities so far in January, adding to $17 billion of withdrawals last year.

A rebound in the dollar and limited support from the central bank also weighed on the currency, said Dilip Parmar , a currency strategist at HDFC Securities Ltd.

A weaker rupee risks stoking inflation in the net oil-importing nation and eroding returns for foreign investors. The rupee declined about 5% in 2025 and was Asia’s worst-performing currency.

A delay in finalizing a trade deal with the US has also hurt sentiment. India is still among the few major economies yet to seal a trade pact with the US. In the meantime, steep 50% tariffs on Indian goods have weighed on exporters, while strong imports have kept dollar demand high and added pressure on the rupee.

The rupee’s fall was exacerbated by dollar buying around the reference rate fixing, Bloomberg News reported earlier, citing traders. The reference rate for the dollar/rupee was set 0.5% higher than Wednesday. Indian markets were shut on Thursday for a holiday.

“The Indian rupee faces a capital-inflow problem, and has become much more dependent on volatile foreign inflows than in the past,” Michael Wan , senior currency strategist at MUFG Bank Ltd. The bank has downgraded its rupee forecast toward 92 by end-Sept. from 90.80 earlier.