Indian Rupee Falling to Historic Low Against USD in December 2025: Key Reasons Explained

In the first week of December 2025, the Indian rupee fell to 90 level low against the dollar for the first time. The move reshaped market sentiment, triggered RBI action, and raised new questions about inflation, foreign outflows, and the broader Indian Rupee to USD outlook.

Indian Rupee: Historic Break Below 90

The Indian rupee slid through its long-held resistance on December 3 when the Indian Rupee to USD rate moved past 90 for the first time. The spot rate hit 90.43 and settled at 90.19. By December 4, the pair moved to 90.40. The Indian rupee’s falling trend pushed the currency down 6.75% this year and turned it into Asia’s weakest performer.

Indian Rupee News: How the Slide Built Up

On December 1, it opened at 89.62, showing pressure from early FPI selling. The next day ended at 89.92 as importers bought more dollars. December 3 brought the break below 90 while the RBI sold dollars to manage volatility. December 4 closed at 90.40 after a full month of steady weakness.

Why the Indian Rupee to USD Rate Moved Fast

FPI outflows hit $17 billion this year. The trade deficit widened to $41.7 billion in October. The India-US trade deal stalled again. Market players increased speculative dollar buying. The RBI intervened only when the 90 breach triggered disorderly moves.

The RBI prepared for its December 5 policy meeting while tracking every move of the Indian rupee. Analysts expect either a small rate cut or a pause. Many forecast a shift toward 91.50 unless trade issues ease.

Imported goods may cost more. Exporters may gain from a weaker Indian rupee. Market reactions show mixed signals as traders wait for RBI guidance.