Rupee hits all-time low of 91.50 against dollar: Key drivers

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.

Key levels in focus

Market participants said the move beyond earlier technical thresholds has shifted attention to higher trading ranges, while the Reserve Bank of India’s response remains a key factor in containing volatility.