Indian rupee was hard hit on Friday and depreciated by 26 paise to close at 90.16 (provisional) against U.S dollar due to increased global prices of crude oil, sustained outflows of foreign funds and due to increased geopolitical tensions. These together with other factors, market players claimed, attended to dampen the mood towards the emerging market currencies, such as the rupee.
At the interbank foreign exchange market the rupee started off positively at 89.88 against the dollar which was a positive indication of some early optimistic indications. But the local currency could not maintain its gains and slowly went down throughout the session to reach an intraday low of 90.25 and closed at 90.16. This was a 26-paise decline on its last close, and this shows that the currency market remains volatile.
To make matters worse, the U.S dollar gained strength in the world market. The dollar index that follows the performance of the greenback against a basket of six leading currencies was trading 0.11 percent higher at 99.04. A stronger dollar has a tendency to put pressure on the emerging market currencies, because the investors would prefer to invest in the safe assets in the face of uncertainty in the global market.
Crude oil prices had also been high and this also affected the rupee. The world standard of oil was trading at 3.2 percent up at $62.34 in futures trade. An increase in the cost of oil raises the cost of the Indian import bill and aggravates the current account deficit further straining the domestic currency.
The poor mood was reflected in domestic equity markets. The 30 stock index Sensex crashed by 604.72 to close at 83,576.24 and the wider Nifty collapsed by 193.55 to leave the market at 25,683.30.
The foreign institutional investors (FIIs) remained net sellers in the stock market. As of exchange data, on Thursday, January 8, 2026, the shares of FIIs were sold to the tune of 3,367.12 crore.
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