Rupee continues to fall! Currency drops 4 paise in early trade; reaches 90.24 against US dollar

Rupee opened the week on a weak note, slipping 4 paise to 90.24 against US dollar in early trade on Monday, extending its downward momentum from 2025. The decline was triggered by ongoing geopolitical uncertainty as US intervention in Venezuela boosted demand for the American currency.Last week on Friday, the currency had fallen below the 90-mark, closing 22 paise lower at 90.20 against the dollar. The decline came amid disappointing macroeconomic data and a strengthening US currency in overseas markets.According to traders, this muted sentiment was due to continuous withdrawal of foreign fund and strong dollar demand from importers, which dragged rupee down. However, softer crude oil prices and a sharp rise in domestic equities helped limit the downside, they added. Furthermore, any intervention by the Reserve Bank of India (RBI) could provide support to the rupee at lower levels. In 2025, the currency depreciated almost 5% against the US dollar, marking its weakest annual performance since 2022. Despite a softer dollar and most global currencies registering gains, rupee still lagged behind.According to a recent report by SBI Funds Management, the underperformance was fueled by “muted foreign portfolio investor (FPI) inflows, weak export momentum and heightened hedging demand from importers.” Foreign investors withdrew close to $18 billion from Indian equities, citing earnings downgrades, limited exposure to AI-led global growth, and more attractive opportunities in other emerging markets.Looking ahead, the bank expects the rupee to decline by around 2% in the next financial year, with the exchange rate hovering near 92 against the US dollar.