New Delhi, Jan 21— The rupee slid to a fresh all-time low of 91.58 against the US dollar in early trade on Wednesday, extending its losing streak as steady dollar demand, foreign fund outflows and a cautious global environment kept pressure on emerging market currencies.
The local unit weakened by as much as 61 paise in morning deals, breaching its previous record low of 91.0750 touched in mid-December 2025.
It had opened weaker at around 91.08 per dollar and continued to drift lower as selling intensified.
Forex traders attributed the fall to a firm US dollar and rising global uncertainty. “There is persistent demand for dollars from importers and a clear risk-off mood globally,” a forex dealer at a state-run bank said.
“With US yields elevated and geopolitical concerns resurfacing, emerging market currencies are finding it hard to stabilise.”
The dollar has remained strong on expectations that the US Federal Reserve may keep interest rates higher for longer, pushing up bond yields and drawing funds towards safe-haven assets and reducing appetite for riskier markets, including India.
Pressure on the rupee has also been compounded by heavy dollar demand from metal and energy importers, reflecting India’s dependence on crude oil and industrial raw materials. At the same time, persistent selling by foreign portfolio investors in domestic equities has added to the strain.
“FPIs are still cautious, given global volatility and better returns available in developed markets,” the dealer said.
Weakness in domestic equity benchmarks has further dampened sentiment, as stock market volatility tends to discourage foreign inflows and indirectly impacts the currency market.
Market participants said the Reserve Bank of India appears to be allowing a gradual depreciation of the rupee while stepping in only to smooth excessive volatility.
“The RBI seems comfortable with an orderly move and is not defending any particular level,” another trader said, pointing to the need to conserve foreign exchange reserves.
A weaker rupee is expected to raise the cost of imports and could add to inflationary pressures, particularly through higher energy prices, though exporters may see some benefit from improved realisations.
Going ahead, traders said the rupee’s near-term direction will hinge on key US economic data, crude oil price movements, the pace of FPI flows and any signs of more active intervention by the central bank.