Mumbai: The Indian rupee weakened to an unprecedented level close to 92 per US dollar on Thursday, extending its slide even as the global dollar index hovered near a four-year low.

Market participants attributed the pressure to sustained foreign investor withdrawals—estimated at about $3.9 billion so far this fiscal year—along with a surge in bullion imports and concerns over a widening current account deficit. These headwinds have persisted despite official projections of 7.4% GDP growth for FY26.

In its latest Economic Survey, Finance Minister Nirmala Sitharaman described the rupee as undervalued, arguing that a weaker currency could help boost exports. Meanwhile, the Reserve Bank of India was seen selling dollars in the market to smooth volatility ahead of the Union Budget scheduled for February 1.

Analysis: For exporters, the softer rupee may offer short-term relief, but import-dependent sectors could face higher costs if the trend persists. Much will hinge on whether capital flows stabilise after the Budget and whether the RBI continues to step in to prevent sharp swings. This perspective is analytical opinion; all factual details above are drawn from the original report.