On December 3, 2025, the Indian rupee (INR) fell past the psychological and historical threshold of ₹90 per US dollar (USD) for the first time — hitting around ₹90.13–₹90.14 against the greenback.
Market watchers and economists described the slide as steep — marking one of the worst currency performances for the rupee in recent decades
What’s Driving the Fall — Key Factors Behind the Slide
⚠️ Foreign Capital Outflows & FPI Selling Pressure
One major reason behind the rupee’s drop is massive outflows by foreign portfolio investors (FPIs). Sustained selling of Indian equities and bonds has drained foreign capital, weakening demand for rupee.
🌐 Global Uncertainty & Trade-Deal Impasse with the US
Uncertainty around the US–India trade deal, along with global economic headwinds and rising US interest rates, have reinforced strength of the dollar — putting pressure on the rupee.
📦 Higher Import Demand and Trade Deficit Pressure
Continued demand for dollars by importers (crude oil, electronics, raw materials) amid weak inflows has increased rupee-supply pressure in foreign-exchange markets, contributing to depreciation.
📉 Weak Capital Flows and Limited Central-Bank Intervention
Analysts suggest that limited intervention by the Reserve Bank of India (RBI) this time — compared to earlier episodes — has allowed the rupee to slip more sharply.
What It Means for the Economy, Markets and Consumers
📈 Export & IT-Services Sectors May Gain
A weaker rupee makes Indian exports — including IT services, software, textiles — more competitive globally. As a result, export-oriented sectors may see gains from improved dollar-revenue conversion.
📦 Imports Become Costlier — Inflation, Travel, Imports Hit Hard
Imported goods — electronics, fuel, raw materials — will become more expensive, potentially pushing up inflation. Overseas education, travel, foreign goods, and import-reliant industries may see a cost burden.
📉 Pressure on Consumer Spending & Cost of Living
As everyday goods rely on imports (fuel, electronics, some essential commodities), consumers may feel inflationary pressure. This could hit discretionary spending, affect demand, and add to cost-of-living concerns.
📉 Impact on Markets and Foreign Investment Sentiment
Currency depreciation tends to spook foreign investors. Continued outflows can weaken market sentiment, increase volatility in equities and bonds, and put pressure on foreign-denominated debt and external borrowings.
What to Watch Next — Key Risk Points & What Could Happen
- Whether the rupee stabilises or continues to slide — depends on foreign-capital flows, global economic conditions, and trade-deal developments.
- Possible intervention by RBI to support the rupee — via Forex reserves or monetary/interest-rate measures.
- Impact on inflation, imports, and cost-of-living metrics over coming months.
- Sectors that benefit (exports, IT-services) vs sectors under stress (imports, travel, discretionary retail).
- Exchange-rate expectations: analysts warn that if current trends continue, rupee could test ₹91–₹92 per dollar by mid-2026. Reuters
Conclusion
The Indian rupee crossing ₹90 per US dollar marks a historic moment in India’s currency journey — the outcome of global headwinds, capital outflows, and structural trade pressures. While it offers some upside for export-oriented industries, the move poses risks for inflation, import costs, and everyday consumers.
For businesses, policymakers, and households alike, the coming weeks and months will be crucial — as currency swings influence imports, exports, investment flows, inflation, and growth.
