Sri Lanka, Dec. 31 -- The Indian rupee is poised for its largest annual fall in three years, weighed down by record equity outflows and the lack of a U.S. trade deal that left it out of the rally across Asia, with prospects for a recovery tied to the trade pact.

The rupee was quoting at 89.8650 per U.S. dollar at 10 a.m. IST on Wednesday, marking a 4.74% decline for the year, its worst showing since 2022 when it dropped nearly 10%.

The currency repeatedly fell to record lows during the year, slipping past the 91 level at one point, highlighting the sustained depreciation pressure.

"The rupee's performance this year was largely a capital-flow story, with the RBI adopting a more pragmatic and flexible approach to the exchange rate and al...