The Indian rupee fell by 9 paise to touch a record low of 90.87 against the US dollar in early trade on Tuesday. The fall was mainly due to continuous foreign fund outflows and no clear progress on the India-US trade deal, according to forex traders.

At the interbank foreign exchange market, the rupee opened at its lowest-ever level and moved in a narrow range between 90.77 and 90.87 in early trading hours.

Traders said the rupee’s losses were partly limited as the US dollar weakened globally and crude oil prices declined.

The dollar index, which measures the dollar’s strength against six major currencies, was 0.03 per cent lower at 98.27.

Meanwhile, Brent crude, the global oil benchmark, slipped 0.61 per cent to USD 60.19 per barrel in futures trade.

On Monday, the rupee had already closed at a new all-time low of 90.78, losing 29 paise from the previous session.

Explaining the pressure, Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said, “The US-India trade deal still seems to be off by a distance with the Commerce Secretary saying the first phase will be signed before the end of the year and news that we are closest to the deal being signed. The uncertainty has clouded the recovery on the USD/INR pair as the rupee opened lower with dollar buying happening every day.”

He added that even positive trade data failed to support the rupee due to ongoing foreign investor selling.

Government data released on Monday showed that India’s trade deficit narrowed to a five-month low of USD 24.53 billion in November.

Exports rose 19.37 per cent to USD 38.13 billion, reaching a six-month high, mainly due to higher shipments of engineering and electronics goods.

At the same time, imports fell 1.88 per cent to USD 62.66 billion, helped by lower purchases of gold, crude oil, coal, and coke.

Despite this improvement, the rupee did not recover.

Foreign Institutional Investors (FIIs) continued to pull money out of Indian markets. Exchange data showed that FIIs sold shares worth Rs 1,468.32 crore on Monday.

Wholesale price inflation stayed negative for the second month in a row in November at (-) 0.32 per cent, even though prices of some food items rose on a monthly basis.

WPI-based inflation stood at (-) 1.21 per cent in October and 2.16 per cent in November last year.

On the stock market front, the Sensex fell 363.92 points to 84,849.44, while the Nifty dropped 106.65 points to 25,920.65 in early trade.

The rupee continues to face pressure amid global uncertainty and steady foreign fund outflows.