Rupee Panic: Breaks 90 Mark, RBI Steps In (Again)
The rupee is in a free-fall, and today it crashed through a critical psychological barrier—it hit a fresh record low of 90.4675 against the US dollar. That’s a serious number. It beats the previous low of 90.42 set just a week ago on December 4. The thing is, this is an ongoing crisis.
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X happened (the rupee broke 90). And then Y followed (the RBI had to step in immediately to stabilize the market).
Here’s the breakdown from the ground:
The Currency Meltdown
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New Low: 90.4675 versus the dollar. It’s now worth 50% less than its 2011 value.
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Worst Performers: The rupee is down over 5% in 2025. This makes it the third-worst performer among 31 major currencies, beaten only by the Turkish lira and Argentina’s peso. Let’s be real, that’s terrible company to keep.
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The Irony: This massive depreciation is happening even though the dollar’s overall strength measure has actually reduced by more than 7% globally. This shows the weakness is homegrown, or nothing.
Why the Rupee is Bleeding
It’s a cocktail of trade and capital issues:
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US Trade Deal Failure: The lack of a successful trade agreement with the Donald Trump administration continues to be a massive weight on the currency.
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Hefty Tariffs: The 50% US tariffs on Indian goods are hurting exports and widening the trade deficit.
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Corporate Demand: There’s increased demand for dollars from corporations trying to settle their end-of-year international payments.
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Foreign Capital Outflow: Foreign capital is still leaving the market.
The RBI Intervention
When the rupee hits a fresh low, the RBI is forced to act. Traders reported that the Reserve Bank of India (RBI), led by Governor Sajay Malhotra, stepped in on Thursday to stem the fall.
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The Strategy: The RBI uses India’s capital controls to intervene in both domestic and international markets. In global markets, they primarily use non-deliverable forwards (NDFs)—derivatives contracts that set exchange rates with dollar settlements—operating across hubs like Singapore, Dubai, and London.
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The Challenge: The RBI has to maintain a balance. They can’t intervene too aggressively and drain their foreign reserves, but they can’t sit back and let the currency spiral out of control. It’s a delicate challenge for Governor Malhotra and his team.
The pressure on the central bank is enormous right now to find a way to maintain stability without triggering a larger financial issue. This is an ongoing economic battle.
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Disclaimer: This information is based on public financial reports and commentary from market traders, and should not be taken as financial advice.
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