Indian Rupee Nears Record Low Amid FII Outflows and Global Trade Uncertainties

The Indian rupee depreciated further against the US dollar, closing near record lows around 90.90-90.98 in early January 2026 amid strong dollar demand from metal importers and persistent foreign institutional investor (FII) outflows. Renewed geopolitical tensions, including US President Donald Trump's tariff threats on European countries over Greenland and uncertainty around US-India trade talks, have increased risk aversion, pressuring emerging market currencies. Domestic equity market weakness and limited Reserve Bank of India intervention also contributed to the rupee's decline, while the dollar index showed some weakening and Brent crude prices remained relatively stable.