The Indian rupee weakened further on Wednesday, January 21, falling 23 paise in early trade to touch 91.20 against the US dollar. This marked a fresh low
and prolonged the currency’s downward momentum. A day earlier, the rupee had already settled at an all-time closing low of 90.97, down 7 paise, as persistent dollar demand and sustained foreign fund outflows continued to sap confidence. Market participants suggest that strong buying interest from metal importers and a cautious risk environment are the key factors behind the latest slide. Global Risks And Capital Outflows Forex traders said heightened geopolitical uncertainty has amplified risk aversion across emerging markets. Fresh expansionary signals from the US have further strengthened the dollar, intensifying pressure on currencies like the rupee. In 2025 so far, the Indian currency has depreciated by 4.95 per cent, underscoring the scale of the challenge. Adding to the strain, domestic equities have struggled amid consistent selling by overseas investors, creating a negative feedback loop between currency and equity markets. The rupee’s recent weakness follows earlier records as well. On December 16, 2025, it had already touched an intra-day low of 91.14 and logged a closing low of 90.93 against the greenback, levels that are now being tested again. Central Bank Watch Data from NSDL shows that foreign institutional investors have pulled out more than $2.7 billion from Indian debt and equities so far in January, exacerbating volatility in financial markets. Amid this backdrop, market participants are closely watching the central bank’s stance. Outlook Looking ahead, traders expect the rupee to remain under pressure in the near term, with a bias toward further depreciation as long as foreign outflows persist and global uncertainties linger. Much will depend on the trajectory of the dollar, geopolitical developments, and the central bank’s approach to managing volatility rather than defending specific levels.
