On December 3rd, the Indian Rupee (INR) breached the psychologically critical 90-per-dollar mark, hitting an all-time low. With a cumulative depreciation of nearly 5% so far this year, the Rupee has emerged as Asia’s worst-performing currency.

Traders have revealed that over the past few weeks, the Reserve Bank of India (RBI) had attempted to defend the key level of 88.80. However, after this level was breached, the depreciation pressure on the Indian Rupee (INR) gradually accumulated, ultimately pushing it close to the psychological integer mark of 90.

Regarding the reasons for the sustained depreciation of the Indian Rupee (INR), Aditi Gupta, an economist at Bank of Baroda, cited key factors including sluggish foreign capital inflows, a record-high trade deficit, and uncertainties surrounding the U.S.-India trade agreement.

Specifically, India’s trade deficit soared to $32.15 billion in October this year, hitting a 13-month high. This deterioration is mainly attributable to a sharp plunge in exports to the United States.