Rupee Crashes To Record 90.42 Per Dollar As Markets Turn Uneasy

The rupee crashed to record 90.42 per dollar on 4 December 2025 in active Mumbai trade.

What caused the sudden slide became the focus of trading rooms soon after markets opened. Early orders from large importers raised demand for dollars within minutes. 

The Reserve Bank of India flagged this pressure in its November 2025 Monthly Bulletin, which noted rising hedging in short-term contracts. The pattern seen in that report now matches the market scene today.

Why The Rupee Crashed To Record 90.42 Per Dollar?

The market faced three clear signals. The strongest signal came from foreign portfolio investors who withdrew nearly 17 billion dollars this year. This figure was reported by Reuters on 3 December 2025, and it showed how steady exits weakened currency support. 

The second signal came from import demand in crude and electronics as firms prepared for peak winter needs. The third signal was the sharp jump in forward premiums reported by Reuters on 4 December 2025, which said importers rushed to hedge unsettled bills.

These events placed the trading desk under visible strain. The picture becomes clearer when theory is applied to the current situation.

What Basic Currency Theory Says About This Slide?

Currency theory links exchange rate movement to inflows, outflows, inflation gaps and trade values. When outflows exceed inflows, the price of each dollar rises in rupee terms. The Reserve Bank of India’s Annual Report 2024-25 explains this under the balance-of-payments chapter. The same chapter notes that sudden demand for hedging can lift forward costs.

Before the table, it helps note that these indicators are used by analysts for early warnings on currency pressure.
 

These figures sit at the core of market interpretation. The reserve position saw drops in parts of October 2025, which indicated that the central bank stepped in to slow sharp swings. 

The Ministry of Finance External Debt Status Paper published in August 2025 pointed to high short-term repayments, which created hedging demand as the rupee weakened. The trade statistics for October and November 2025 showed high import bills, adding more pressure.

How Does This Movement Reflect Previous Periods of Rupee Weakness?

The current record did not appear without signs. In September 2025, Loansjagat mentioned about the rupee slipping near the 88 to 89 mark during tariff-related uncertainty. That update created the first alert that currency strength could weaken further. The current fall brings these earlier signals into one clear line. The market now looks at how official action has shifted over the years during similar currency events.

How Government And RBI Responded During Past Currency Stress?

Past actions offer a guide to the approach used today. In 2022, the Reserve Bank of India relied on spot dollar sales to smooth rapid movement. 

This was documented in the Annual Report 2022-23. In 2023, the Ministry of Finance issued revised rules on external commercial borrowings to manage offshore exposure. In 2024, the Press Information Bureau listed liquidity steps during a short phase of currency pressure.

These moves guided traders on the likely stance during future swings. 
 

Currency desks today noted that intervention appears narrower in 2025. Instead of resisting each fall, the central bank now seems to focus on smoothing sharp jumps without fixing the rupee at any level. .

Conclusion

The record level of 90.42 per dollar reflects the combined pull of foreign exits, heavy import bills and costlier hedging. 

The day ended with caution across trading desks as they now wait for updated reserve data and the next policy signals. The market expects a sensitive phase ahead, shaped by flows and central bank guidance.