Overview
- The rupee closed the year at 89.88 per dollar on Dec. 31 after briefly firming to 89.75 on Dec. 30, holding in the high‑89s as the RBI sold dollars to steady trading.
- The currency fell about 5% in 2025, making it the weakest performer among major Asian peers, according to multiple reports.
- The rupee breached key levels in December and touched a record low near 91.07 on Dec. 17 after first breaking 90 earlier in the month.
- Foreign investors pulled an estimated $16.5 billion from equities during 2025, with some reports citing roughly $17.5 billion in total FIIs exits, while the government linked rupee weakness to a wider trade gap and uncertainty over an India‑US trade pact.
- The RBI focused on smoothing volatility rather than defending a band, using spot operations and a reported $5 billion buy‑sell swap as reserves hovered around $693.3 billion, and analysts expect elevated FX volatility into early 2026 even as growth and inflation trends remain supportive.