FX.co ★ Rupee Slips to New Record Low

The Indian rupee has depreciated, surpassing the 90.6 mark against the US dollar to reach a new all-time low. This decline is primarily driven by the lack of a trade agreement with the United States, amidst ongoing negotiations, and the persistent withdrawal of foreign investments. With over a 5% drop in value this year, the rupee stands as Asia's weakest performing currency, largely due to the impact of steep US tariffs on exports. Trade negotiations remain pivotal, with ongoing discussions between Prime Minister Narendra Modi and President Donald Trump, as India seeks to secure concessions from US tariffs of up to 50% on certain goods. Concurrently, India witnessed a rise in consumer price inflation, which climbed to 0.71% in November, up from a record low of 0.25% in October, aligning closely with market expectations of 0.7%. Despite this increase, inflation has stayed below the Reserve Bank of India's lower tolerance threshold of 2% for the third consecutive month, retaining the possibility for further interest rate reductions in 2026. The central bank is set to receive the December inflation figures before its February policy meeting, which will provide a clearer picture of underlying inflation trends.