Rupee Slumps Near All-Time Low 91 per Dollar; FPIs Exit, Market Sell off Rattles Indian Currency

The Indian rupee today slipped sharply to a record low, continuing its losing streak today as well due to heavy foreign fund outflows and uncertainty over a delayed India-US trade deal. The domestic currency weakened for the sixth consecutive session, underperforming all major Asian peers.

On Wednesday, the rupee fell 0.3% to 91.2275 per US dollar, breaching its previous lifetime low recorded in December. The earlier all-time low of the rupee stood at 91.0750, hit in mid-December 2025. Because of sustained selling pressure, the rupee is reeling under stress despite intermittent intervention by the Reserve Bank of India.

Several other Asian currencies also traded slightly weaker against the US dollar on January 21. In early Asian trade, the Japanese yen hovered largely flat near 158.20 per dollar. The Chinese yuan, however, weakened marginally to 7.196. Other Asian currencies such as the South Korean won (1,373), Indonesian rupiah (16,290), and Malaysian ringgit (4.24) also declined against the dollar.

Why Is the Rupee Falling Today?

The sharp fall in the USD INR exchange rate is because of multiple factors, including foreign portfolio investor (FPI) outflows, weak domestic equity markets, and global uncertainty linked to US trade policies.

According to market data, FPIs sold Indian equities worth Rs. 2,938 crore in the previous session, adding pressure on the rupee. The sell-off in equities also dragged benchmark indices sharply lower, which worsened the sentiment around Indian assets as well.

"The dollar remained well bid as equity markets corrected sharply. While Indian 10-year government bond yields were kept in check by the RBI." a finorex report mentioned.

The report added "Although the dollar index slipped to 98.53, aided by geopolitical tensions related to Greenland, the rupee failed to benefit meaningfully. The uncertainty stems from the US Supreme Court (SCOTUS) postponing its decision on the legality of US tariffs on other countries, with clarity now expected only after February 20.

Overall, the trend for the rupee remains on the downside, with the RBI being the sole seller of dollars in the market to prevent a fresh all-time low,

"91.10 remains a critical stop-loss level for importers who have not yet covered near-term dollar payments. Meanwhile, exporters are advised to sell only on a cash or spot basis, keeping a stop loss near 90.70 for unhedged positions, given the unpredictability of RBI intervention," as per the report.

Global & Domestic Cues Add to Pressure

Global markets also turned risk-averse after US equities posted their biggest single-day fall in three months. All three major US indices recorded their worst session since October, triggered by a renewed "sell America" trade. The move followed President Donald Trump's fresh push on Greenland and threats of additional tariffs, reviving fears of a broader trade war.

The drop in the Indian rupee coincided with a sharp sell-off in domestic equities. The stock market this morning extended losses for the sixth straight session. The Sensex today opened nearly 200 points lower at 81,971, while the Nifty 50 was trading around 25,168, down over 60 points at the time of writing. Yesterday's sell-off was particularly brutal, wiping out nearly Rs. 9.86 lakh crore in investor wealth as market capitalisation plunged sharply.