The rupee has fallen to its lowest level in 4 weeks against the dollar.Image Credit source: ChatGPT
The rupee has once again appeared to be in deep trouble against the dollar. Especially when the biggest fall of the year was seen in the rupee on Friday. At present, the rupee has reached its lowest level in 4 weeks against the dollar. On the other hand, the dollar is trading with the strongest strength in 6 weeks. If we look at the data, the rupee has declined for the third consecutive day. Due to which the rupee has fallen by more than 60 paise against the dollar.
Experts say that further decline in rupee may be seen in the coming days. The special thing is that the rupee may fall even more, leaving behind its historical lower level of about a month ago. This means that the rupee can go to the level of 91.20 to 91.25 against the dollar. Experts even say that if there is no intervention from RBI, the rupee may move towards a historic decline against the dollar on Monday.
Now the biggest question is what is happening that a big fall in the rupee can be seen. In fact, the biggest reason for this is the non-conclusion of the trade deal between America and India. At the same time, due to demand for dollars, the rupee is falling. There has been a rise in the dollar index, the effect of which is clearly visible. At the same time, the withdrawal of foreign investors from the stock market has not ended yet. The effect of which is clearly visible on the rupee. Let us also tell you what experts have to say about the rupee.
Biggest decline of the year
The rupee fell for the third consecutive day on Friday and fell by 44 paise to close at 90.78 per dollar. Pressure on the rupee increased due to heavy demand for dollars and withdrawal of capital from the market by foreign institutional investors. Foreign currency traders said concerns over US-India trade talks and geopolitical tensions further impacted investors’ trading sentiment. The special thing is that this fall in the rupee is the biggest fall of the year 2026.
The rupee opened at 90.37 per dollar in the Interbank Foreign Currency Exchange market. Reached a low of 90.89 per dollar during trading. Finally it closed at 90.78 against the dollar, which is a decline of 44 paise from the closing price on Wednesday. The rupee had closed at 90.34 against the US dollar on Wednesday. Foreign exchange markets were closed on Thursday due to Brihanmumbai Municipal Corporation (BMC) elections in Mumbai. The rupee declined for the third consecutive trading session. During this period it fell by 61 paise.
Main reasons for fall in rupee
- No trade deal: The main reason for the fall in the rupee has been the failure to reach a trade deal between India and America. Recently the American Ambassador had said that both the countries want to do a trade deal. India is a very important country for America. A meeting has also taken place between the two countries. But no positive response has come yet.
- Dollar demand: There has been a significant increase in the demand for dollars in recent times. The way US President Donald Trump has arranged the tariffs, there is an increase in demand for dollars. According to experts, there may be an increase in demand for dollars from local businessmen.
- Withdrawal of foreign investors: Withdrawal of foreign investors from the Indian stock market is also a major reason for the fall in the rupee. If we look at the figures, on Friday a profit of Rs 4,346.13 crore was realized from the stock market from foreign investors. Whereas in the current year, foreign investors have withdrawn Rs 22,530 from the stock market.
- stock market crash: Even though there was a slight rise in the stock market on Friday, there was a lot of pressure in the month of January. Sensex and Nifty have seen a decline of about 2 percent in the current month. The effect of which is visible on the rupee.
- Dollar index rises: The effect of the rise in the dollar index is also clearly visible. At present the dollar index is at a high of 6 weeks. If we look at the data, the dollar index is trading at the level of 99.38 on Friday. An increase of more than 1 percent has been seen in the dollar index in the month of January.
- Rise in crude oil prices: Another reason for the big fall in the rupee is the rise in crude oil prices. Which has arisen due to tension with Iran. In the international market, Brent crude oil of Gulf countries has crossed $ 64 per barrel. This means that in the current year there has been an increase of 5.39 percent in the price of crude oil. On January 14, the price of Brent crude oil reached near $67.
There may be further decline
Mirae Asset Sharekhan’s Research Analyst Anuj Chaudhary said that due to continuous withdrawal of foreign capital and strengthening of the dollar, the rupee fell for the third consecutive trading session. Chaudhary said that the rupee is expected to fall amid uncertainty over trade agreement talks and geopolitical tensions. Strong dollar, withdrawal of foreign investors from capital markets and high crude oil prices may put pressure on the rupee. He estimated that the spot price of rupee against the dollar could remain in the range of 90.50 to 91.25.
HDFC Securities Research Analyst Dilip Parmar said the Indian rupee’s weak performance against Asian currencies is due to the combined effect of high demand for the dollar and declining inflow of foreign capital. Increasing these pressures are the concerns regarding US-India trade talks. Parmar further said that during the forex market close on Thursday, the RBI’s recent fixing of dollar bids related to forex swaps further increased the technical weakness.