For the first time ever, the Indian rupee has fallen below Rs 90 to the US dollar, signaling more than just a number—it marks a new phase in India’s economic journey. But what does this mean for you, and why should you care? Let’s break it down.
Breaking the Barrier
On Wednesday, the Indian rupee crossed a historic threshold, falling below Rs 90 to the US dollar. While economists may see this as a data point, the effects are far-reaching and touch everyday life.
Why It Matters
The rupee’s weakness isn’t just for traders—it affects household budgets, student expenses, and the cost of imports.
-
Imports = Inflation: India imports about 90% of its oil and depends on global suppliers for electronics, fertilizers, and edible oils. A weak rupee pushes up prices for your next iPhone, fridge, or car.
-
Foreign education costs: Students studying abroad could now pay Rs 5–10 lakh more per year compared to 2023.
Zooming In: Why Did the Rupee Drop?
Three key reasons:
-
Trade tensions with the US: Failed negotiations and rising US tariffs (some by 50%) hit business confidence.
-
Investor exodus: Foreign investors pulled out $17 billion from Indian equities in 2025, adding pressure.
-
RBI policy shift: The IMF reclassified India’s exchange rate regime from “stabilized” to “crawl-like,” meaning the RBI guides the rupee rather than defending it aggressively.
The Big Picture
What sets this rupee drop apart from previous crises?
-
The US dollar remains stable—it’s not the main culprit.
-
India’s reserves are strong: the RBI holds $690 billion.
-
The RBI’s approach has shifted from firefighting to long-term resilience, aiming for stability rather than defending Rs 90 at all costs.
Bloomberg even called the rupee “Asia’s worst-performing currency this year.”
How It Hits Your Wallet
-
Oil & energy: Imported crude and edible oils become costlier.
-
Electronics & appliances: Items like laptops, smartphones, and fridges will see higher prices.
-
Everyday inflation: Cooking oil, LPG, and petrol pinch budgets, especially for lower- and middle-income households.
Impact on families and students:
-
Tuition for students abroad at $50,000/year now costs Rs 45 lakh, up from Rs 40 lakh.
-
Education loans denominated in dollars are 12–13% costlier in rupee terms.
-
Families earning Rs 1.5 lakh/month may need to dip into savings or cut expenses.
Is This Good for Exporters?
The impact varies:
-
Winners: IT and business service firms billing in dollars see better margins.
-
Mixed: Pharma exporters gain on revenue but face rising import costs.
-
Losers: Textiles and light manufacturing are hit by US tariffs despite favorable rates.
A Silver Lining: Remittances
India received $137–138 billion in remittances in 2024. A $500 monthly remittance now brings in Rs 45,000 instead of Rs 40,000, giving families a boost.
What Indian Families Should Do
-
Match currency of income and loans.
-
Hedge wisely for tuition and foreign payments.
-
Plan with a cushion: Assume the rupee could dip to Rs 93–95/$ in 2026.
-
Leverage remittances smartly.
-
Diversify investments, favoring sectors like IT or pharma.
Final Thoughts
The rupee slipping below Rs 90 is a wake-up call for households, students, and businesses alike. While it brings higher costs for imports and foreign expenses, it also offers opportunities for exporters and remittance recipients. The key is planning ahead, diversifying income and investments, and staying informed. In an interconnected economy, small shifts in currency can ripple through everyday life—being prepared is the best safeguard.