The Indian rupee has become Asia’s worst-performing currency of 2025 and is heading toward its steepest yearly drop since 2022, when the Russia-Ukraine conflict pushed global oil prices above $100 per barrel.
India’s Rupee Hits a New Low: Asia’s Worst-Performing Currency of 2025
Unlike 2022, the decline this year is mainly driven by increased US tariffs on Indian goods and a withdrawal of foreign investors from India’s stock markets.
To prevent the currency from falling further, the Reserve Bank of India has reportedly sold over $30 billion worth of foreign currency assets since late July, based on Bloomberg Economics estimates.
These interventions helped the RBI prevent a fresh record low in mid-October.
Despite that, the rupee slid to 89.4812 per dollar on November 21, which many analysts interpret as a sign that the RBI stopped intervening or chose to scale back support.
Experts believe the central bank may be preserving its reserves in case trade negotiations with the US take longer than expected.
The rupee is now entering a critical phase where better trade relations and reduced tariffs could help stabilise it.
If those improvements don’t materialise, the RBI may be forced to step in again to prevent further depreciation.
How Early Gains in the Rupee Quickly Reversed in 2025
The year began with the rupee weakening in January before it regained some strength in March and April.
Its strongest point was in early May at 83.7538 per dollar, which coincided with optimism that India would soon secure a favourable trade agreement with the US.
Expectations of lower tariffs boosted confidence that foreign investment would increase as companies looked for manufacturing alternatives to China.
The situation shifted dramatically in July when US President Donald Trump announced steeper-than-expected tariffs and warned that India could face punishment for buying Russian oil and defence equipment.
These measures shattered hopes of India gaining preferential treatment, and the rupee experienced its worst monthly performance since 2022.
By August, the US imposed a 50% tariff on most Indian exports — the highest in Asia — along with an additional secondary 25% penalty tariff linked to India’s trade with Russia.
Following these developments, the rupee repeatedly hit new record lows, dropping below 88 per dollar.
