Forex Alert: Rupee Sinks to 89.94 Against US Dollar

Rupee Hits 89.94: Why Local Currency is Sliding Today

The Indian Rupee fell 23 paise to 89.94 against the U.S. dollar in early trade this Friday, December 26, 2025. Driven by a combination of recovering crude oil prices and steady foreign fund outflows, the currency is now flirting with the critical psychological level of 90.

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Analysts suggest that thin holiday trading volumes and a lack of a fresh U.S.-India trade deal are exacerbating the downward pressure.

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The 90-Level Breach: Why the Rupee is Weakening

The Rupee’s decline is being fueled by “dollar demand” from importers and a resurgent energy market. Specifically, Brent crude has climbed back to $62.34 per barrel, increasing India’s import bill. Furthermore, Foreign Institutional Investors (FIIs) offloaded equities worth ₹1,721.26 crore on Wednesday alone.

Consequently, the local unit opened weak at 89.84 and quickly slid to 89.94, erasing gains made earlier in the week.

Impact on Stock Markets and Sentiment

The currency slump has directly mirrored the “negative trend” in domestic equities. Specifically, the Sensex dropped over 180 points in early trade, while the Nifty slipped below the 26,100 mark. Forex traders are pointing to “trade deal uncertainty” as a major factor denting investor sentiment.

With the markets coming off a Christmas break, the lack of fresh domestic triggers has left the Rupee vulnerable to global volatility and a strengthening Dollar Index (DXY), which currently sits at 97.89.

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Market Snapshot: Dec 26, 2025

Steps Taken by the RBI

While the Rupee is sliding, experts like Anil Kumar Bhansali from Finrex Treasury Advisors note that the broader depreciation trend remains “intact but calibrated.”

The Reserve Bank of India (RBI) has previously intervened with state-run banks to sell dollars near these levels to prevent a runaway crash. However, the absence of an official “India-US Trade Deal” continues to weigh more heavily on the currency than stellar GDP growth prints.

Conclusion

The Rupee’s slide toward 90 reflects a perfect storm of high oil costs and capital flight. For consumers, this could eventually lead to costlier electronics and fuel, though the immediate impact on the inflation basket remains limited….

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Disclaimer: Forex and equity markets involve significant risk. This report is based on early-morning interbank rates for December 26, 2025. Always check with a certified financial advisor before making currency-based investments.

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