Rupee Hits Record Low Of Rs 90.42 Against Dollar In Early Dec Amid Global Volatility: Finance Ministry

New Delhi, Dec 16 (KNN) The Indian rupee weakened to record levels against the US dollar in late November and early December 2025, with the exchange rate touching Rs 89.64 per dollar in the third week of November and slipping further to Rs 90.42 on December 4, the Finance Ministry informed Parliament.

Responding to a question in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said the rupee closed at Rs 89.41 per dollar on November 21, 2025, before extending losses in subsequent sessions amid volatile global and domestic conditions.

Drivers of Rupee Depreciation

The Government attributed the rupee’s decline to a combination of domestic and global factors, including movements in the dollar index, capital flow trends, interest rate differentials, crude oil price fluctuations, and the current account deficit. 

During FY 2025–26, the depreciation has also been influenced by a widening trade deficit and uncertainty surrounding ongoing trade-related developments between India and the United States, alongside relatively weak capital account inflows.

The Finance Ministry reiterated that the rupee is market-determined, with no fixed target, band or level, and that exchange rate movements reflect broader macroeconomic and global financial conditions rather than administrative control.

RBI Monitoring and Stabilisation Measures

The Reserve Bank of India (RBI), the Minister said, closely monitors the foreign exchange market and intervenes to manage excess volatility rather than defend any specific exchange rate. 

The central bank tracks global developments such as monetary policy actions by major central banks, geopolitical events, movements in G-10 and emerging market currencies, crude oil dynamics and key economic data releases.

To enhance foreign exchange inflows, the RBI has introduced several measures in recent months. 

These include extending the maximum repayment period for pre- and post-shipment export credit from one year to 450 days until March 31, 2026, easing rules for merchanting trade transactions, allowing authorised dealer banks to lend in rupees to residents outside India in select neighbouring countries, and permitting surplus balances in Special Rupee Vostro Accounts to be invested in central government securities.

Impact on Economy and Government Assessment

Addressing concerns over the impact of depreciation on India’s global standing, the Finance Ministry said a weaker currency can improve export competitiveness while exerting upward pressure on the cost of imports. The net impact, it added, depends on the degree of pass-through of international commodity prices to domestic inflation.

(KNN Bureau)