Indian Rupee Falls to Record Low of 89.46 as US Dollar Demand Surges

Indian Rupee Hits Record Low of 89.46 Against US Dollar as Strong Greenback Demand Triggers Sharp Slide

The Indian rupee hit a record low of 89.46 against the US dollar during afternoon trade on November 21, marking one of its steepest intraday declines in recent months. The sharp depreciation, driven by heavy demand for the greenback and a noticeable absence of strong Reserve Bank of India (RBI) intervention, sent ripples through currency markets and positioned the rupee as the worst-performing Asian currency for the day.

At 3:05 pm, the rupee traded at 89.46 per dollar, sliding from its opening level of 88.6787 and significantly weaker than its previous close of 88.7075. With this fall, the Indian rupee is down 0.86% compared to November 20. The session also witnessed a dramatic 67-paise intraday plunge, the biggest single-day fall since May 8, 2025, when the currency had depreciated by 89 paise.

Breaking Key Support Levels Accelerates Rupee Weakness

Currency traders highlighted that the decisive breach below the 88.80 support mark acted as a major trigger for the rupee’s slide. Once this level gave way, short covering and aggressive dollar buying pulled the rupee swiftly lower.

“Breaking the key 88.80 mark pushed the Indian rupee to a record low of 89.54—its biggest single-day percentage decline since May 8—making it the worst performer among Asian peers,” said Dilip Parmar, Senior Research Analyst at HDFC Securities.

Parmar added that the sudden surge in the USD/INR pair was fueled by short covering, delays surrounding the US–India trade deal, and what appeared to be a lack of timely support from the RBI.

Also Read : Markets Slip After Two-Day Rally; Nifty Falls Below 26,100 and Sensex Drops 401 Points

Weak RBI Intervention Adds Pressure as Currency Tests New Lows

The latest depreciation marks a rare instance where the Indian rupee hit a record low despite the RBI’s consistent presence in the market over the past few weeks. Currency experts noted that the central bank had been actively providing support through dollar sales to curb excessive volatility.

However, today’s session appeared different.

While the RBI is expected to intervene if the rupee continues testing new levels, traders suggest that the central bank chose not to aggressively defend the currency during the early hours, allowing market forces to dictate the movement.

According to treasury desks, the central bank has “allowed a natural adjustment” after several days of tight defense. Market participants, however, anticipate fresh intervention if the rupee moves closer to the psychological 89.75–90.00 zone.

Fading Expectations of Fed Rate Cuts Add to Rupee Weakness

The fall in the Indian rupee also comes amid waning hopes of a US Federal Reserve rate cut in the near term. The combination of mixed US jobs data and uncertain macroeconomic conditions has strengthened the dollar and pushed Treasury yields higher, drawing capital into the US markets.

As expectations shift toward a prolonged high-rate environment, emerging market currencies—including the rupee—are witnessing renewed pressure.

Currency strategists highlight that the delay in the US–India trade deal has added an additional layer of uncertainty, prompting importers and corporates to front-load dollar purchases in anticipation of further rupee depreciation.

Asian Currencies Influence Early Gains but Rupee Reverses Quickly

Interestingly, the rupee opened slightly higher—3 paise stronger—supported by mild gains in other Asian currencies and easing US Treasury yields. However, the early optimism faded within minutes as local dollar demand surged, particularly from oil companies, corporates, and foreign fund outflows.

The sharp reversal underlines how vulnerable the rupee is to external factors, especially at a time when global investors remain risk-averse.

Market Participants Expect RBI to Step In If Pressure Builds Further

Despite the significant fall, currency traders remain confident that the RBI will not allow uncontrolled volatility. Any sustained breach above 89.50–89.60 could trigger a deeper pullback, but aggressive intervention may limit further downside.

Over the past month, the RBI has been selling dollars consistently to stabilise the currency, depleting reserves modestly but keeping currency swings in check. Today’s depreciation, however, suggests that policymakers are willing to allow limited weakness to bring the rupee in line with global currency adjustments.

Importers and Corporates Rush to Cover Exposure as Rupee Hits Record Low

The sharp fall in the rupee prompted a rush among import-dependent sectors—particularly energy, electronics, and commodities—to hedge their near-term exposures. With the rupee hitting fresh record levels, many corporates accelerated dollar purchases to avoid further cost escalation.

Exporters, on the other hand, benefited from the weakness, but most prefer stability over sharp day-to-day swings.

What Lies Ahead: Rupee Expected to See Volatile, Range-Bound Movement

Currency analysts expect the rupee to trade within the 89.00–89.80 range in the coming sessions, depending on global dollar strength, RBI action, and macroeconomic cues.

Key triggers to watch:

• Minutes from the US Federal Reserve

• Progress on US–India trade negotiations

• Crude oil price movement

• RBI currency intervention patterns

• FII flows in equity and debt markets

While the Indian rupee hitting a record low highlights near-term stress, experts believe that long-term fundamentals remain stable, supported by strong forex reserves and a robust domestic macro environment.

• Nifty 50
• Bank Nifty
• Sensex