A man counts Indian currency notes at a market in Bengaluru, India, August 1, 2025. REUTERS
MUMBAI, Jan 20 (Reuters) – The Indian rupee continued its weakening trend on Tuesday, with ongoing flow-based dollar demand tightening the squeeze as the currency broke past 91 per dollar levels for first time in a month, putting it within striking distance of a fresh record low.
The currency opened a tad weaker, but declined rapidly to 91.0525. It was at 91.02 as of 10:20 a.m. IST after closing at 90.91 in the previous session, and plumbing an intraday low of 90.99.
The rupee fell for four sessions through Monday, losing around 1% in that period, leaving it perched near the closely watched 91 level and its all-time low of 91.0750 per dollar, set in mid-December.
“The moves are dependent on the flows scenario, with focus turning to the RBI if the local currency is close to breaching any major level” a currency trader at a state-run bank said.
Bankers say the near daily presence of the central bank is lending a small degree of confidence to rupee bulls that a new record low may not be hit imminently.
The Reserve Bank of India’s support on Friday and Monday was relatively light, with traders saying the central bank was seen offering dollars at multiple levels rather than mounting a defence at any single point.
Meanwhile, Asian currencies were mixed on Tuesday, while the dollar index retreated to its lowest level in a week.
Growing tension between the U.S. and European Union has put some pressure on the greenback as well as pushed U.S. yields higher.
U.S. President Donald Trump’s threats to rekindle a trade war with Europe over the future of Greenland has sparked nerves across markets.
These developments introduce new complexities into the trade and diplomatic relationship between the U.S. and E.U., suggesting a likely resurgence in trade tensions, DBS Bank said in a note.
Reporting by Dharamraj Dhutia; Editing by Rashmi Aich and Ronojoy Mazumdar
