The Indian rupee slipped to a record low on Monday, as an ongoing stalemate in the U.S.-India trade negotiations continued to weigh on the currency alongside persistent foreign selling of local equities and bonds.

The rupee weakened 0.2% to 90.6475 against the U.S. dollar, eclipsing its previous all-time low of 90.55 hit on December 12.

The currency, Asia’s worst performer this year, avoided steeper losses amid likely central bank intervention, four traders told Reuters.

What’s behind rupee fall?

The currency has declined 5.5% against the dollar year-to-date, as steep U.S. tariffs of up to 50% on Indian goods hurt exports to its biggest market and diminish local equities’ appeal to foreign investors.

Overseas investors have net sold Indian stocks worth more than $18 billion so far in 2025, making India one of the worst-hit markets in terms of portfolio outflows. Foreign investors have also net sold bonds worth over $500 million in December.

India’s trade data for November is due later in the day, with economists pencilling in a $32 billion goods deficit, down from a record high of $41 billion in October.

Remarks from India’s chief economic advisor that the trade deal is likely only by March have bogged sentiment down, and outflows have been near-constant, a trader at a Mumbai-based bank said.

India and the European Union, meanwhile, are also unlikely to finalise a trade deal by this year’s end, Bloomberg News reported on Friday.

The negative sentiment on trade has also left the rupee unable to benefit from a broadly weaker dollar. The dollar index is down 1.1% so far this month.

“Rupee may continue to underperform amid dollar weakness in the medium term. We see a range of 89.60-90.60 over the next 6 weeks,” forex advisory firm IFA Global said.

Elsewhere, India’s benchmark equity indexes, the BSE Sensex and the Nifty 50 were down 0.4% each, tracking losses in regional shares as sentiment remained tepid heading into a week of key data releases and central bank meetings.