The Indian rupee fell sharply by 76 paise to an all-time low of 91.73 per US dollar on January 21, 2026, weighed down by sustained foreign portfolio investor outflows, tariff-related concerns linked to Donald Trump, and broader risk aversion stemming from uncertainty around Greenland. The decline came even as the Reserve Bank of India intervened to support the currency.
The Indian rupee had a rough day on January 21, sliding to an all-time low against the US dollar as selling pressure intensified across markets. The currency fell sharply after foreign investors continued to pull money out of Indian equities, while global sentiment turned cautious following fresh tariff remarks linked to Greenland by Donald Trump.
After opening weaker at 91.08, the rupee steadily lost ground through the session, briefly touching 91.74 before ending the day near 91.71, its sharpest fall in months. Other Asian currencies also struggled, adding to the pressure.
Although the Reserve Bank of India stepped in to steady the market by selling dollars, heavy capital outflows, uncertainty around a potential US trade deal, and strong demand from importers ultimately kept the rupee under strain.
FPI Exodus and Trade Deal Stalls
January proved punishing for the rupee as foreign investors continued to pull money out of Indian markets. Foreign portfolio investors sold ₹33,000 crore worth of equities during the month, logging net selling on 12 trading days, as global sentiment deteriorated amid uncertainty linked to the Greenland issue and fresh tariff threats from Donald Trump against the European Union.
The currency slipped past the psychologically important 91-per-dollar mark, ending the month down 2.36% and extending its annual decline to over 6%. The rupee was the second-worst performer among Asian currencies this year, sliding almost 2% thus far.
Delays in a possible India-US trade deal, coupled with worries about higher US export duties, further exacerbated the pressure to keep the rupee under sustained strain.
Global Turmoil Amplifies Pressure
Consequently, the rupee came under a lot of pressure since rising global risk aversion, prompted by uncertainty regarding Greenland-related developments and a sell-off in Japanese bonds, weighed on emerging market currencies. Likewise, Indian equities have fallen for a sixth consecutive session, reflecting the weakness in the currency market.
The dollar strengthened on the back of higher US bond yields, while importer demand for gold and oil added to the pressure on the rupee. Analysts cautioned that the currency could slide toward 92 per dollar if capital outflows continue without a stronger intervention response from the Reserve Bank of India.
RBI Backstop and Outlook
The central bank stepped in forcefully to support the currency, but the rupee remains under pressure near record lows amid capital flow–driven headwinds. Dealers see support around 91.50, while resistance is placed near the 92-per-dollar level.
Market participants expect the rupee to stabilise if there is progress on trade negotiations and a return of foreign portfolio inflows. However, tariff-related risks could re-emerge later in the year, keeping the outlook uncertain.
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