Kumar Bahukhandi
NR vs USD: Dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.05 per cent lower at 98.59.(Photo: AFP)
At the interbank foreign exchange, the rupee opened at 91.05 and lost ground to trade at an all-time low of 91.74 against the greenback, down 77 paise from its previous close
Mumbai: The Indian rupee on Wednesday January 21, 2026 faltered to a new low of 91.7425 as heightened tensions between the United States-European Union over Greenland tariffs, Japan bonds sell off, sustained FPI outflows and US-India trade frictions kept the currency under pressure. The pace of rupee depreciation has been so aggressive that a weak dollar index and intermittent dollar selling by the RBI failed to provide a meaningful floor. Elevated dollar demand from importers, particularly those dealing in precious metals also exacerbated the rupee’s slide.
Traders said that the rupee could touch 92 levels soon.
At the interbank foreign exchange market, the rupee opened at 91.10 against the US dollar. It made a low of 91.74 and a high of 91.10 and finally closed 72 paise down at 91.69 compared to its previous close of 90.97. Meanwhile, the dollar index (DXY) hovered near the 98.62 level against a basket of six major currencies. The index has declined about 0.5 per cent over the past five sessions.
On Wednesday January 21, 2026 , the rupee was the worst-performing Asian currency. It is down 2 per cent so far this month, after falling about 5 per cent in 2025. Foreign Portfolio Investors have offloaded Rs. 33000 crore in Indian equities so far in January.
US President Donald Trump’s renewed push to acquire Greenland from Denmark has reignited the sell America trades with threats of 10 per cent tariffs on major EU economies (rising to 25 per cent in June) prompting retaliation signals and Danish Pension Fund divestments from US Treasuries. This undermines the dollar’s safe haven status, boosting gold to historic high of $ 4878 per oz and silver to $ 95.56 per oz. A sell off in equity markets have added to the pressure on the rupee.
Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities said, “USD/INR has surged to record highs near 91.70, driven by a combination of sustained FPI outflows, adverse global risk sentiment stemming from geopolitics and US–India trade frictions, and a slowdown in exporter dollar conversions even as importer hedging demand remains strong.”
“RBI intervention is helping smooth volatility but is not reversing the trend. In the near term, USD/INR could extend towards 92–92.50 levels. Key catalysts to watch are progress on the India-EU FTA and signals from the Union Budget on Feb 1. Over the medium term, the rupee looks undervalued, but stabilization will require improvement in capital flows and global risk appetite,” he added.
