MUMBAI, India: India's rupee tumbled to fresh record lows, slipping past 90 per U.S. dollar as persistent outflows, a widening trade deficit, and stalled trade talks kept the currency under strain, prompting traders to warn that further losses are likely without stronger central bank support.

The rupee touched an all-time low of 90.29 before closing at 90.19, down nearly 0.4 percent on the day and extending its losing streak to a sixth session. It has now fallen 5.3 percent this year, putting it on course for its sharpest annual drop since 2022 and making it Asia's weakest-performing currency in 2025.

The decline comes despite robust domestic GDP growth, underscoring a widening gap between India's strong internal fundamentals and external pressures such as punitive U.S. tariffs and fading foreign investment.

"I'm not losing sleep over it," V Anantha Nageswaran, the country's chief economic adviser, said. He added that the currency's weakness has not fed into inflation and said he expects a recovery in 2026.

Analysts said the absence of progress in U.S.–India trade negotiations is aggravating pressure on the rupee.

"Every day that we do not have a trade deal, the FX demand from trade deficit and outflows keeps pushing US$/INR higher, while FX supply is relatively thin and inconsistent," said Joey Chew, head of Asia FX research at HSBC. "Foreign investors are also losing patience."

After brief net inflows in October, overseas equity flows have flattened again. Foreign investors have sold about US$17 billion of Indian equities this year, while FDI and external borrowings have also softened.

Indian markets reflected the caution, with the Nifty 50 slipping 0.2 percent and the benchmark 10-year bond yield inching up to 6.53 percent.

HDFC Bank, citing October's record $40-plus billion trade deficit, expects the current account gap to approach 1.1 percent of GDP this financial year and the balance of payments to remain in deficit. Economist Sakshi Gupta said the rupee is likely to trade in the 92–93 range next quarter.

Weak macro indicators have coincided with signs of mounting speculative positioning. The 1-month dollar/rupee non-deliverable forward points surged to a seven-month high of 23.25 paisa, a nearly 50 percent jump in three days.

"The way the points have moved tells you speculators are simply trading what the price action is signalling — the upside momentum is picking up," a Singapore-based banker said.

Market participants say the Reserve Bank of India's limited intervention is emboldening speculative bets and reinforcing importer hedging demand. Onshore far-forward points rose sharply, with implied 1-year forward yields at their highest since January.

With negotiations on key trade issues still stalled, investors warn the rupee may remain vulnerable for months.

"The longer it takes for a trade deal to come, the longer the pressure on the rupee is likely to persist," Gupta said.