The Indian rupee experienced significant volatility in 2025, depreciating approximately 4.7% against the US dollar and nearing historic lows, closing near 90 per dollar. While external factors like global dollar strength, foreign portfolio investor (FPI) outflows, and escalating trade tensions, including US tariffs, contributed to the pressure, domestic factors were less influential. The Reserve Bank of India intervened to manage volatility, but persistent capital outflows and economic uncertainties marked a challenging year for the currency.