The Indian rupee weakened to a record low against the US dollar on Thursday, sliding to 91.9850 and edging close to the psychologically important 92 level. The decline was driven by persistent foreign portfolio outflows, increased demand for dollar hedging and concerns over US trade tariffs, which outweighed support from India’s strong economic growth.

So far in 2025, the rupee has depreciated around 2%, and it is down nearly 5% since the United States imposed steep tariffs on Indian merchandise exports. This has occurred even as India posted robust GDP growth of 8.2% in the September quarter, underscoring the growing influence of external pressures on the currency.

Market participants said the Reserve Bank of India likely intervened early on Thursday to smooth volatility as the rupee neared the 92 mark, rather than defend any specific level. The central bank has repeatedly maintained that it allows market-driven movements while stepping in only to curb excessive swings.

Analysts attribute the rupee’s weakness to a combination of factors, including high US tariffs, rising bullion imports, reduced dollar supply from exporters and aggressive hedging by importers. With global uncertainty persisting, experts warn the rupee could remain volatile, with some forecasts projecting further depreciation in the coming months.