USD vs INR: Rupee hits record low, inches closer to 92 against US dollar—What is driving the fall?

USD vs INR: The rupee weakened to a fresh record low against the US dollar on Friday, extending pressure from global cues and persistent dollar demand.

The rupee depreciated by 41 paise to trade at 91.97 against the US dollar in early trade, marking its weakest level on record.

The move came after a brief recovery in the previous session. On Thursday, January 22, 2026, the rupee rebounded from its all-time low and ended 7 paise higher at 91.58 against the US dollar.

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Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.03 per cent higher at 98.38.

Brent crude, the global oil benchmark, was trading 1.09 per cent higher at USD 64.76 per barrel in futures trade, adding pressure on the local currency.

On the domestic equity market front, the Sensex fell 797.94 points to 81,509.43, while the Nifty declined 240.55 points to 25,049.35.

Foreign institutional investors offloaded equities worth Rs 2,549.80 crore on Thursday, according to exchange data.

Foreign investors have pulled out about USD 3.5 billion from Indian equities so far this month. This has pushed the Nifty 50 down nearly 5 per cent in January. Selling has intensified this week, with the index down more than 3 per cent, reinforcing pressure on the rupee.

Dollar index volatility adds pressure

According to Manoj Kumar Jain, director, Prithvi Finmart, the dollar index has been highly volatile in recent sessions. The dollar index ended Thursday on a weaker note at 98.10, down 0.31 per cent. The USD-INR January 28 futures contract also settled slightly lower at 91.6475 on the National Stock Exchange.

Jain said the dollar index slipped after reports that some European countries may sell US treasuries amid tensions over the Greenland issue. A surge in Japanese government bond yields also dented the dollar. However, strong US GDP data and a rebound in US equity markets provided support to the greenback at lower levels.

He expects the dollar index to remain volatile and trade in the range of 97.70 to 98.55 amid global financial market swings and geopolitical tensions.

FPI selling and equity weakness hit rupee

On the domestic front, heavy selling by foreign portfolio investors continued to pressure the rupee. Foreign institutional investors offloaded equities worth Rs 2,549.80 crore on Thursday, according to exchange data.

Foreign investors have pulled out around USD 3.5 billion from Indian equities so far this month. This has dragged the Nifty 50 down nearly 5 per cent in January, with selling intensifying this week.

On Friday, the Sensex fell 797.94 points to 81,509.43, while the Nifty declined 240.55 points to 25,049.35.

Crude oil and global cues remain key

Brent crude, the global oil benchmark, was trading 1.09 per cent higher at USD 64.76 per barrel in futures trade, adding to pressure on the local currency.

Meanwhile, the dollar index was trading 0.03 per cent higher at 98.38 in early trade, reflecting continued uncertainty in global currency markets.

What lies ahead for rupee

Jain said the rupee saw some stability after a mild recovery in domestic equities and profit booking in crude oil prices from higher levels. Hopes of a possible India–EU free trade agreement have also offered some support at lower levels.

However, ongoing FPI outflows, global market volatility and geopolitical tensions continue to pose risks. The rupee is expected to remain volatile and trade in the range of 91.08 to 92.35 in the near term.

Latest update: Rupee settles at all-time low of 91.93 against US dollar.