In a historic first, the Indian Rupee (INR) breached the psychologically significant ₹92.00 mark against the US Dollar (USD) on Thursday, January 29, 2026.
The currency touched an all-time intraday low of ₹92.01 during early trading sessions, primarily driven by massive capital outflows and the looming impact of US-imposed trade tariffs. While the Reserve Bank of India (RBI) intervened to pull the currency back slightly, the milestone has triggered a debate over India’s external economic balance.
1. The Breaching of ₹92: A Timeline
The rupee’s descent in January 2026 has been swift, fueled by a combination of global policy shifts and domestic market pressure.
- January 21: Rupee plunged to ₹91.65, setting a new closing low.
- January 23: First intraday touch of ₹92.00 before a minor recovery.
- January 28: A sharp 31-paise drop led to a record closing of ₹91.99.
- January 29 (The Breach): The currency opened at ₹91.95 and quickly hit an all-time low of ₹92.01.
2. Why is the Rupee Falling?
Despite India’s strong GDP growth (projected at 6.8%–7.2%), the currency is facing what the 2026 Economic Survey calls a “strategic power gap.”
- US Trade Tariffs: Since the US imposed steep tariffs on Indian merchandise exports in late 2025, the rupee has depreciated nearly 5%.
- FII Outflows: Foreign Portfolio Investors (FPI) offloaded over $4 billion (₹36,811 crore) from Indian equities in January 2026 alone, adding to the $19 billion outflow seen in 2025.
- Policy Divergence: While the US Federal Reserve held rates steady in January, rising US Treasury yields have made the dollar more attractive, sucking capital away from emerging markets.
- Import Bills: Surging crude oil prices (Brent trading near $70/barrel) and elevated bullion imports have widened the trade deficit.
3. The RBI Response: “Smoothing” vs. “Defending”
Market analysts note that the RBI has shifted its strategy from defending a hard “line in the sand” to allowing “orderly depreciation.”
- Intraday Intervention: On January 29, the RBI reportedly stepped in with aggressive dollar sales to keep the rupee from settling below 92.
- Structural Measures: Reports suggest the RBI is considering a reintroduction of the FCNR (Foreign Currency Non-Resident) deposit window—a tool last used during the 2013 “Taper Tantrum”—to attract medium-term foreign funding.
- Economic Survey Quote: The government’s annual survey stated the rupee is “punching below its weight,” arguing its valuation does not reflect India’s “stellar economic fundamentals.”
4. Future Outlook: Will it Hit ₹94?
Currency experts are divided on the rupee’s trajectory for the remainder of 2026.
| Firm / Expert | Projected Rate (2026) | Reasoning |
| DBS Bank | ₹93.00 – ₹94.00 | Sustained FPI outflows and trade deficit pressures. |
| Goldman Sachs | ₹94.00 | Expectation that US tariffs will persist longer than anticipated. |
| CR Forex Advisors | ₹91.00 – ₹91.20 | Possible recovery if a new US-India trade deal is signed in Q2. |
| Choice Wealth | ₹92.20 – ₹92.50 | Immediate resistance level; further breach likely without aggressive RBI action. |
Conclusion: A Paradox of 2026
The rupee’s record low represents a unique paradox: India remains the world’s fastest-growing major economy, yet its currency is hitting all-time lows. This “decoupling” is a direct result of the fractured global trade system. As the Union Budget approach on February 1, 2026, all eyes are on Finance Minister Nirmala Sitharaman for fiscal measures that might stabilize external balances and restore investor confidence.
