Rupee Breaches 90 Mark Against Dollar

New Delhi, December 03, 2025: In a significant and closely-watched development, the Indian Rupee (INR) has crossed the key psychological threshold of 90 to the US Dollar (USD), hitting a fresh record low. This historic breach signals intensifying pressure on the Indian currency, which briefly touched $90.13 in early trade before showing some attempts at a minor pullback.

The movement, which saw the Rupee fall an additional 6 paise in opening trade, comes after weeks of sustained depreciation and has captured the attention of policymakers, businesses, and the average Indian consumer.

What is Driving the Rupee’s Weakness?

The slide is not due to a single factor but a convergence of both global and domestic pressures that have eroded market confidence:

• Weak Capital Flows: There has been a continued exodus of funds by Foreign Portfolio Investors (FPIs) from the Indian equity and debt markets. Despite India’s strong GDP growth, external uncertainties are prompting foreign investors to pull out, creating a high demand for the dollar.
• Trade Deal Uncertainty: The market has been keenly awaiting a trade deal between India and the US. Repeated delays and ongoing trade tensions, including the imposition of significant US tariffs on certain Indian exports, have weighed heavily on investor sentiment, adding to the pressure on the Rupee.
• Persistent Importer Demand: India is a major importer of essential goods, most notably crude oil, electronics, and gold. A wider trade deficit—the difference between what India imports and exports—means local banks are constantly buying more dollars to pay for these imports, which naturally drives up the dollar’s price against the Rupee.
• Muted RBI Intervention: While the Reserve Bank of India (RBI) has historically intervened by selling dollars to curb excessive volatility, analysts note that the recent intervention has been described as “mild.” The IMF’s recent reclassification of India’s exchange rate regime to a “crawl-like arrangement” suggests the RBI might be allowing for greater flexibility in the currency’s movement.

The Impact on the Common Man

The depreciation of the Rupee is not just a financial headline; it has a direct and tangible impact on daily life:

• Higher Import Costs and Inflation: Since India imports a large percentage of its crude oil (nearly 90%), a weaker Rupee makes it more expensive to buy fuel. This increase in input costs can lead to higher prices for almost everything—from transport to food—fueling domestic inflation. Imported goods like smartphones, laptops, and appliances will also become steeper.
• Costlier Foreign Education and Travel: Students paying tuition fees in USD or other foreign currencies will face significantly higher costs in Rupee terms. Similarly, international travel will become more expensive for tourists.
• Relief for Exporters: On the flip side, a weaker Rupee is a boon for Indian exporters, particularly sectors like IT and pharmaceuticals. They receive more Rupees for every dollar earned, which makes Indian goods and services more competitive in the global market.

What Happens Next?

The breach of the ₹90 mark is a critical moment. It shifts the market’s focus to the next potential target, which analysts suggest could be ₹91 or higher if the factors weighing down the currency do not ease. Market players are now watching closely for the RBI’s next steps, especially ahead of the upcoming Monetary Policy Committee (MPC) meeting, for any signals of a more decisive intervention strategy to stabilize the currency. The resolution of the US-India trade deal is seen as the major catalyst that could potentially halt or reverse the current trend.