The fall of the Indian rupee against the US dollar has picked up pace sharply in the latest leg of its long-term depreciation cycle, when it touched a record low and crossed a psychological mark of 90 against the US dollar.
The domestic currency took just 231 days to slide from the 85 level to the 90 mark, highlighting a much faster erosion compared with earlier levels.
By comparison, the rupee had taken 542 days to move from 80 to 85, 608 days from 75 to 80, 382 days from 70 to 75, 1,198 days from 65 to 70, 42 days from 60 to 65, 268 days from 55 to 60, 846 days from 50 to 55, 45 days from 45 to 50, and 143 days from 40 to 45, according to Bloomberg data.
The fastest fall was seen in the 60–65 levels, which took just 42 days, but at a time when India’s external sector was undergoing structural shifts. The latest acceleration from 85 to 90, however, has unfolded amid relatively stable macro fundamentals but intense global financial volatility.
The current depreciation has been far more orderly than in earlier bouts of severe economic stress such as the 1991 India economic crisis, the Global Financial Crisis, the twin balance sheet problem, the COVID-19 shock and the Russia-Ukraine war.
In each of those phases, the rupee had seen abrupt depreciation driven by capital outflows, collapsing risk appetite and severe stress on India’s macro fundamentals. In contrast, the current depreciation during the tariff war has been gradual, reflecting an economy that is better cushioned against global shocks.
Why rupee fell?
The weakness has intensified in recent sessions. On December 3, the rupee slipped past the 90 mark against the US dollar, driven by sustained equity outflows and lingering uncertainty over the proposed India-US trade pact.
Market participants point to a combination of factors weighing on the rupee, including strong demand for the dollar globally, elevated US bond yields, foreign portfolio investor (FPI) outflows from domestic equities, and uncertainty on the trade and geopolitical fronts.
“The rupee is facing pressure from both global headwinds and domestic capital outflows. While India’s macro fundamentals remain relatively stable, short-term market dynamics are clearly adverse,” a currency trader at a state-run bank said.
According to Bloomberg data, the rupee depreciated 4.76 percent between December 31, 2024, and December 10, 2025, making it the worst-performing currency in Asia during this period. The Indonesian rupiah was the weakest, down 3.4 percent, while the Philippine peso declined 2.3 percent and the Hong Kong dollar eased just 0.18 percent.
Even though the currency has depreciated, Chief economic advisor V Anantha Nageswaran expressed confidence even as the Indian rupee breached Rs 90-mark on December 3 amid persistent equity outflows. Nageswaran said he is not “losing sleep” over the weakening of the domestic currency as long as it is not hurting exports.
“It will come back next year. Right now, it's not hurting our exports or inflation. I am not losing my sleep over it. If it has to depreciate now probably is the right time,” the top economist said at the CII IndiaEdge Summit on December 3.
RBI intervention
Even as the Indian rupee touched a new record low and crossed a psychological level of 90 against the US dollar, the RBI is seen absent in the market with just limited interventions at certain levels.
Currency experts expect that the limited intervention is suggesting a potential surprise in the upcoming monetary policy. It may even be a significant announcement or commentary from the central bank in the December policy announcement, said sources who didn’t want to be named.
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