ANALYSIS Why INR at 90/USD is a big concern for RBI's monetary policy committee meeting

Indian rupee

As the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is set to commence its bi-monthly meeting later today (December 3), the sharp depreciation of the Indian rupee against the US dollar is likely to remain a concern , currency experts said.

Experts also fear that the central bank may allow the currency to depreciate with limited intervention.

“The RBI, it seems, is adopting a more soft touch approach to intervention, given that it is already considerably short in forward contracts, including NDF (Non-Deliverable Forward) . It may therefore want to use its intervention power judiciously,” said Abhishek Goenka, Founder & CEO of India Forex Asset Management-IFA Global.

Further, Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said that a  muted RBI intervention has contributed to the swift depreciation. With the RBI policy announcement due on December 5 , markets expect clarity on whether the central bank will step in to stabilise the currency or not.

The local currency opened at an all-time low and crossed the 90-mark against the US dollar on persistent equity outflows and uncertainty around the India-US trade deal.

The MPC begins it meeting later in the day on December 3 , and the interest rate decision is due on December 5.

Experts said that the central bank is expected to acknowledge the currency’s depreciation in the  monetary policy, but may avoid signalling any levels to the currency.

RBI Governor Sanjay Malhotra has repeatedly stated that the central bank “does not target any specific level” of the rupee and instead prioritises curbing abnormal volatility.

Malhotra added recently that the rupee's recent weakness reflects natural market dynamics, and that an annual depreciation of around 3-3.5 percent aligns with long-term trends. This stance allows the MPC to retain room for a growth-supportive rate cut, without being tied to defending any particular level and intervene in the markets to stabilise the volatility.

According to Bloomberg data, the Indian rupee depreciated 5.08 percent between December 31, 2024, and December 3, 2025. It has become the worst-performing currency among Asian peers, after the Indonesian Rupiah, which depreciated 3.17 percent during same period. Philippine's Peso depreciated 1.54 percent, and Hong Kong Dollar depreciated 0.18 percent.

Among Emerging Markets (EMs), the Indian rupee is the third worst-performing currency. Argentina's Peso and the Turkish Lira have depreciated 29.18 percent and 16.69 percent, respectively.