Rupee Hits Record Low Amid Greenland Dispute; Trades at ₹91.30 Against Dollar

New Delhi: The Indian rupee plunged to a new all-time low against the US dollar on Wednesday, hitting ₹91.2950 per dollar, surpassing the previous record of ₹91.0750. Analysts attribute the sharp depreciation to rising global uncertainty following U.S. President Donald Trump’s controversial Greenland claim, coupled with foreign capital outflows and delays in an India-U.S. trade deal.

This month alone, the rupee has weakened by approximately 1.5%, adding to the 5% decline experienced in 2025. Despite India’s current account deficit remaining under control, foreign investments have slowed significantly, intensifying pressure on the currency.

Foreign Outflows and Market Concerns

• January has already seen nearly $3 billion exit the Indian market, while 2025 recorded a historic $18.9 billion outflow.
• Importers are preemptively securing dollars to hedge against further rupee weakness.
• Forward premiums for hedging are currently insufficient to counter expected declines in the rupee.

Structural Factors at Play
According to ANZ Bank FX strategist Dheeraj Nim, “The biggest challenge for the rupee remains capital flows. While the Reserve Bank of India may tolerate a weaker rupee for now, it could intervene if pressures intensify.” India Forex Advisors highlighted that the rupee’s performance reflects structural demand-supply imbalances rather than domestic fundamentals. The currency remains highly sensitive to corporate dollar demand and foreign portfolio flows.

Potential Impact of Greenland Tensions
Escalating tensions over Greenland could trigger further foreign capital outflows, putting additional downward pressure on the rupee. The Indian equity market has already reacted: Tuesday saw the largest single-day drop in eight months, with foreign investors selling over $30 million in shares. Meanwhile, the absence of progress on a formal India-U.S. trade agreement has limited potential inflows of foreign capital, leaving the rupee vulnerable.