The Indian rupee experienced its steepest annual depreciation in three years during 2025, ending the year around 89.86 per US dollar. This decline is attributed to record equity outflows, global trade disruptions, and the absence of a trade deal with the US, which has led to significant foreign investor withdrawals. While the Reserve Bank of India has intervened, its approach has been described as pragmatic and flexible. Experts suggest a US trade pact could offer temporary relief, but underlying pressures may persist, with the rupee expected to remain volatile.