Rupee crossed ₹90: What’s Driving the Fall and What It Means for You

The Indian Rupee has slipped to record lows against the US dollar multiple times recently — touching levels around ₹90.95 on December 16 before RBI intervention. It’s not the first time this has happened, and it definitely won’t be the last. Currency movements are normal in a global economy, but when the fall is sharp, people naturally worry.

Here is why the Rupee is falling right now?

1. Delays in the India–US Trade Deal

A major reason behind the rupee’s fall is the delayed progress in the India–US trade agreement, which has created uncertainty and hurt investor sentiment.

2. Foreign Investors Pulling Out

Foreign Portfolio Investors (FPIs) have been selling Indian assets and moving money to the US, strengthening the dollar and weakening the rupee.

3. Strong US Dollar Globally

The US dollar has been gaining strength due to global economic uncertainty. When the dollar rises, most currencies including the rupee fall.

4. Global Market Uncertainty

Geopolitical tensions, trade policy changes, and risk‑off sentiment have pushed investors toward “safe” assets like the US dollar.

 What Are the Disadvantages of a Weak Rupee?

1. Imports Become Expensive

India imports crude oil, electronics, machinery, and more. A weaker rupee means:

• Higher fuel prices

• Costlier smartphones, laptops, and appliances

• Increased transportation and manufacturing costs

2. Inflation Pressure

Costlier imports push up the overall price level in the economy. Everyday items—from food to transport—become more expensive because higher import costs ripple through supply chains. This can reduce purchasing power and make life more expensive for households.

3. Overseas Education & Travel Cost More

Students studying abroad need more rupees to pay the same tuition fees, accommodation costs, and living expenses. Families traveling internationally also face higher flight, hotel, and shopping costs. A weak rupee makes global experiences significantly more expensive.

4. Businesses With Dollar Loans Suffer

Companies that borrowed in US dollars must now repay a larger amount in rupee terms. This increases their debt burden, reduces profits, and can even affect their credit ratings. Sectors like aviation, infrastructure, and power are especially vulnerable.

5. Investor Sentiment Weakens

A falling currency can make foreign investors cautious, creating a cycle of more outflows.

Has This Happened Before? Yes — Many Times.

India has faced sharp rupee declines in:

• 2013 (Taper Tantrum)

• 2018 (Oil price spike)

• 2020 (COVID‑19 shock)

• 2022 (Global inflation + Ukraine war)

• 2025 (Current fall)

Each time, the reasons were different, but the pattern was similar:

Global uncertainty + strong dollar + foreign outflows.

 How Has India Handled It in the Past?

1. RBI Intervention

The Reserve Bank of India often steps in to stabilize the rupee by:

• Selling US dollars from its reserves

• Buying rupees to reduce volatility

This has happened again recently, with analysts noting “aggressive central bank intervention” during the fall. The RBI sharply sold dollars in both spot and offshore markets to halt the rupee’s rapid slide, pulling it up from near 91 to below 90.3. 

2. Managing Liquidity

RBI adjusts interest rates and banking system liquidity to control inflation and stabilize the currency. Tighter liquidity can make the rupee more attractive to investors. These measures help reduce speculation and maintain financial stability.

3. Encouraging Dollar Inflows

India has previously introduced special deposit schemes for NRIs, relaxed rules for foreign portfolio investors, and boosted export incentives. These steps attract more dollars into the economy. Higher inflows help strengthen the rupee and improve market confidence.

4. Strengthening Trade Policies

Over the long term, India works on reducing import dependence and improving export competitiveness. Trade agreements, manufacturing incentives, and diversification of supply chains all help reduce vulnerability to currency swings. These structural reforms make the economy more resilient.

What the Rupee’s Fall Means for You 

1. Everyday Items May Get Costlier

India imports crude oil, electronics, machinery, and raw materials. When the rupee weakens, these imports become expensive, which means:

• Higher petrol/diesel prices & higher transportation and delivery costs

• Costlier mobile phones, laptops, appliances

This often leads to overall inflation.

2. EMIs for Dollar‑Denominated Loans May Increase

Some Indian companies borrow in dollars. If the rupee falls, their repayment cost rises, and this can indirectly affect:

• Job stability

• Company performance

• Prices of goods/services they sell

3. Good News for Exporters & IT Employees

If you work in IT, consulting, or export‑oriented industries, a weaker rupee can actually help. Companies earn in dollars but spend in rupees, boosting margins.

4. Your Investments May See Short‑Term Volatility

Foreign investors often pull money out when the rupee weakens. This can cause stock market dips, nervous sentiment, short‑term volatility but long‑term investors usually stay unaffected.

5. Gold Prices Often Rise

Gold becomes more expensive when the rupee weakens. If you’re planning to buy jewellery, it may cost more.

Conclusion

The rupee hitting an all‑time low is worrying, but it’s not unusual in a globalized economy. Most of the pressure today is coming from external factors, not internal weakness. India has navigated similar situations before, and the RBI is already working to stabilize the currency.

Currencies rise and fall; what matters is how well the economy adapts, and India has a strong track record of doing exactly that.