The Indian rupee weakened further on December 16, sliding to a new all-time low of 91.05 against the US dollar as uncertainty around the India–US trade deal and continued foreign fund outflows kept pressure on the currency.

The rupee opened near 90.79, after hitting a low of 90.785 in the previous session before ending Monday slightly stronger at 90.73. By around 11:30 am, it was trading at 91.05, down about 0.34% on the day.

What’s dragging the rupee down

Market watchers attributed the decline to a mix of factors:

• Lack of clarity on the India–US trade agreement, which has weighed on sentiment despite no major new economic shock
• Persistent capital outflows
• A widening trade deficit, adding to demand for dollars
• A weaker-rupee bias pushing importers to hedge more, while exporters hold back on selling dollars, reducing supply in the market

Amit Pabari, Managing Director at CR Forex Advisors, said the “confidence gap” is largely linked to the unresolved trade-deal question, which continues to hang over the market.

Key levels traders are watching

In the near term, analysts see 90.00–90.20 as a support zone, while 90.80–91.00 is being watched as a key resistance band—now effectively tested as the rupee pushes past 91.

RBI event in focus

Traders are also tracking a scheduled USD/INR buy/sell swap auction, which is expected to help the RBI manage volatility and improve its ability to sell dollars into the market when needed.

The rupee has moved from 90 to 91 per dollar in about five sessions, is down roughly 2% over the past month, and has extended its year-to-date decline to around 6%, according to the figures cited.