Rupee Hits Record Low Amid Greenland Tensions and Global Trade Turmoil

The Indian rupee slid to a record low on Wednesday, posting its steepest single-session decline in about two months as global risk aversion — driven by renewed geopolitical and trade tensions involving the United States and Europe — triggered a broad retreat from emerging market assets.

The rupee touched an intraday low of 91.7425 per U.S. dollar before ending the day at a record closing low of 91.6950, down 0.8%.

Traders said the sharp fall was driven by a combination of importer hedging demand, weak equity sentiment and stop-loss triggers, while the Reserve Bank of India (RBI) was seen providing only limited support near key levels.

RBI seen stepping in selectively

Market participants said the central bank was likely present around the 91.00 level but largely allowed the rupee to track broader risk-off moves once the downtrend accelerated.

“The move is flow-led — but stop-losses and thin liquidity amplified it,” a trader said, adding that the RBI appears focused on preventing disorderly movement rather than defending a specific exchange rate.

Greenland tensions add to global trade turbulence

The global trigger was a fresh spike in geopolitical uncertainty after U.S. President Donald Trump revived controversial remarks about acquiring Greenland, alongside renewed tariff threats against Europe — developments that unsettled markets and boosted demand for safe-haven assets.

Trump has also said some European countries could face 10% tariffs linked to opposition to the U.S. stance on Greenland, raising fears of a wider transatlantic trade conflict.

The rupee’s decline came in tandem with broader weakness across Asian risk assets, as investors rotated toward safer assets such as the Swiss franc and gold.

Outflows and lack of catalysts weigh on rupee

Compounding the external volatility is persistent capital outflow pressure. Foreign investors have sold around $3 billion worth of Indian equities so far this month, following an unusually large outflow in 2025, according to market tracking estimates.

Meanwhile, the lack of progress on an interim U.S.–India trade arrangement — which markets had hoped could provide support flows — has left the rupee without a major near-term catalyst to offset corporate dollar demand.

The rupee is down about 1.5% so far in January after falling nearly 5% in 2025.

Why This Matters

India’s currency weakness is significant because:

1. Rupee depreciation raises import and fuel costs, adding inflation sensitivity
2. The RBI appears to be tolerating gradual weakening as long as moves remain orderly
3. Persistent foreign outflows and trade uncertainty keep downside pressure elevated

Summary

The rupee hit a record intraday low of 91.7425 and closed at 91.6950 per dollar on Jan 21, 2026, falling 0.8% in a single session. Traders attributed the move to global risk-off sentiment linked to Greenland-related geopolitical tensions and tariff threats, alongside foreign outflows and importer dollar demand. Markets expect RBI intervention mainly to smooth volatility rather than defend any fixed level.

FAQs

Q1: How low did the rupee fall today?

It hit an all-time intraday low of 91.7425 and closed at a record low of 91.6950 per dollar.

Q2: Why did the rupee weaken so sharply?

Traders cited global risk aversion, importer hedging demand, stop-loss triggers, and continued foreign selling.

Q3: Did the RBI intervene?

Market participants said the RBI likely offered support around key levels, but intervention appeared limited as the rupee tracked global moves.

Q4: What is the ‘Greenland’ link?

Trump’s remarks about Greenland and associated tariff threats against Europe raised trade-war concerns, driving investors toward safe havens and away from emerging market assets.

Q5: How much has the rupee fallen recently?

It is down around 1.5% in January 2026, after falling roughly 5% in 2025.