Why the Rupee hits an all-time low of 91.50 against the Dollar: Key Drivers Explained

Rupee vs Dollar: The Indian rupee weakened further to 91.50 against the US dollar on Wednesday (January 21), extending losses after opening near all-time lows, as global uncertainty and sustained foreign outflows continued to pressure the currency.

Global risk aversion intensifies

Forex traders said rising geopolitical uncertainty and renewed expansionary signals from the United States have increased risk aversion across global markets. The cautious backdrop has kept emerging market currencies under pressure, with investors favouring safer assets.

Steady dollar demand offsets softer index

Despite a marginal dip in the dollar index, demand for the greenback remained firm in the domestic market. Traders said elevated US Treasury yields have supported dollar assets, limiting any relief for the rupee.

Equity market weakness adds to strain

Domestic factors compounded the pressure, with a sluggish equity market weighing on sentiment. Continued selling by foreign investors reduced dollar inflows, tightening liquidity in the local foreign exchange market.

Further downside in sight

According to ANZ, the rupee “has a bias to weaken further,” with levels of 92.5–93 well within reach if current trends continue. The currency is in uncharted territory, but the Reserve Bank of India is reportedly

tolerating the depreciation, as the weakness is driven by structural and global factors rather than speculative activity.

Key levels and outlook

Market participants said a move beyond the 91.50 mark could shift focus toward higher trading ranges, while any corrective pullback may find support around 90.30–90.50. The RBI’s intervention will remain a key factor in moderating volatility.