Indian rupee slips past 91 against US dollar:FPI outflows, Trump tariff fears and global uncertainty weigh on markets, deepen currency stress

The Indian rupee hit a fresh record low of 91 against the US dollar on Tuesday. It opened at 90.93 and weakened further to an intraday low of 91.01, pressured by sustained selling from foreign portfolio investors (FPIs) and rising global trade tensions. The rupee has remained under stress since the beginning of 2026. In December 2025, it breached the 90-per-dollar mark for the first time. Within just 20 days of the new year, it has now crossed 91, highlighting mounting pressure on the domestic currency. Market experts attribute this weakness to renewed tariff threats by US President Donald Trump and escalating global uncertainty, prompting investors worldwide to move funds into safe-haven assets such as the US dollar and gold. Key reasons behind the rupee’s decline 1. Heavy foreign investor outflows Foreign portfolio investors have been consistently pulling money out of Indian equities. In the first 20 days of January 2026 alone, FPIs sold shares worth ₹29,315 crore. As these investors convert rupees into dollars while exiting, demand for the dollar rises, strengthening it and weakening the rupee. 2. Trump’s tariff policies and rising global uncertainty Fresh tariff threats by US President Donald Trump against European nations, along with geopolitical tensions such as the Greenland dispute, have increased global market uncertainty. During such risk-off phases, investors typically withdraw money from emerging markets like India and shift towards safer assets such as the dollar and gold, further pressuring the rupee. 3. Strong US economy and higher interest rates The US economy continues to show resilience, with declining unemployment and strong growth indicators. This has strengthened expectations that US interest rates will remain elevated. Higher yields on US bonds and bank deposits are attracting global capital, boosting the dollar’s strength worldwide. Focus on US Supreme Court Verdict On January 20, the US Supreme Court is set to deliver a crucial verdict on the legality of Trump-era tariffs. A ruling in favor of the tariffs could intensify the global trade war and further pressure emerging market currencies. However, an adverse ruling may offer temporary relief to global markets, including the rupee. Rupee may slide further to 92 According to Amit Pabari, Managing Director of CR Forex Advisors, if the rupee decisively crosses 91.07, it could soon move toward the 91.70–92.00 range. However, the Reserve Bank of India (RBI) has been actively intervening to prevent excessive volatility. The 90.30–90.50 zone is currently seen as a strong support level for the rupee. Impact of rupee depreciation Benefits Drawbacks Depreciation makes imports and overseas education costlier A weaker rupee directly raises the cost of imports, impacting everything from crude oil to electronics. It also makes foreign travel and education significantly more expensive. For example, when the exchange rate was ₹50 per dollar, Indian students in the US needed ₹50 to get $1. Now, at ₹91 per dollar, the same $1 costs ₹91—sharply increasing tuition fees, living expenses, and other costs. How is currency value determined? When a currency loses value against the US dollar, it is referred to as currency depreciation. A country’s foreign exchange reserves play a crucial role in determining currency strength. These reserves are used for international trade and payments. In simple terms, a balance between India’s dollar reserves and foreign demand for the rupee helps maintain currency stability. Any imbalance leads to volatility in the exchange rate.