The Indian rupee opened 5 paise lower at 90.14 against the U.S. dollar on December 9, compared to its previous close of 90.09, as weak foreign portfolio flows and rising demand for dollars in the non-deliverable forwards (NDF) market weighed on sentiment, currency experts said.

According to Amit Pabari, Managing Director at CR Forex Advisors, the rupee has been weakening steadily rather than sharply. He noted that foreign investors have already sold more than $1 billion worth of Indian equities so far this month, taking total portfolio outflows close to $17 billion for the year. The sustained exit of capital has increased dollar demand, adding continuous pressure on the rupee.

Data from Bloomberg shows that the rupee remains the third-worst performing currency in Asia this year, after the Indonesian rupiah and the Philippine peso.

Bank of America said in a recent note that the rupee has depreciated 4.7% against the dollar on a year-to-date basis in 2025 and more than 5.8% over the past year. On a real effective exchange rate (REER) basis, the weakness has been even more pronounced, with year-to-date depreciation estimated at 8.6% until November and nearly 12.1% over one year.

The bank pointed out that such magnitude of depreciation is significant even in a historical context, highlighting that the rupee had declined about 8.7% in 2018, 14% in 2013, and 18.7% during the global financial crisis in 2008.

Despite allowing some controlled depreciation to ease exchange market pressures, the Reserve Bank of India is expected to remain active in both the spot and forward currency markets. Analysts believe the central bank will continue to provide dollar liquidity and intervene as needed to curb excessive volatility.