Indian Rupee Breaches ₹90 Per US Dollar for the First Time: What’s Driving the Fall and How It Hits Your Wallet

On Wednesday, 3 December 2025, the Indian rupee finally did what traders had been fearing for weeks: it slipped decisively past the psychologically crucial ₹90 per US dollar mark, hitting fresh record lows in the process. In early and mid‑session trade, the currency fell to around ₹90.13–90.20 per dollar, eclipsing Tuesday’s all‑time low near ₹89.95 and marking its fifth to sixth straight day of losses. ^[1]

Despite India posting some of the fastest GDP growth in the world this year, the rupee has now weakened roughly 5% year‑to‑date, making it Asia’s worst‑performing major currency in 2025. ^[2] The slide is being blamed on a toxic mix of stalled India–US trade talks, punitive US tariffs, record trade deficits, persistent capital outflows and a more hands‑off Reserve Bank of India (RBI).

Below is a detailed, news‑style explainer of what happened on 3 December, why the rupee is falling, and what ₹90 to a dollar means for households, students, travellers and investors.

1. Rupee at Record Low: What Exactly Happened on 3 December 2025?

The milestone

On 3 December 2025, the rupee breached ₹90 per US dollar for the first time in history, trading around ₹90.13–90.20 in the morning and early afternoon. ^[3]
Reuters data showed an intraday low near ₹90.14, while spot rates hovered just above ₹90 later in the session. ^[4]

From 80 to 90 in a year

The currency has slid from about ₹85 to 90 in under a year, a steeper move than the previous leg from 80 to 85, underlining how the latest phase of weakness has accelerated. ^[5]
Earlier in the week, the RBI repeatedly resisted a break of the ₹88.80–89.50 zone, but once those levels gave way, the rupee quickly tumbled to fresh lows. ^[6]

Market reaction

Domestic equities have turned choppy: Sensex has slipped about 1% over the last week and was down roughly 0.4% intraday on Wednesday, while Nifty fell below 26,000 at one stage as the weaker rupee stoked inflation and foreign‑flow worries. ^[7]
Analysts across brokerages say the rupee move is now a central driver of market sentiment, with foreign portfolio investors (FPIs) reducing exposure even as corporate earnings and growth data remain strong. ^[8]

2. Why the Rupee Is Crashing Despite Strong GDP Growth

At first glance, the rupee’s slump is puzzling. India just reported 8.2% GDP growth in the September quarter, beating expectations and reinforcing its reputation as the world’s fastest‑growing major economy. ^[9]

Yet the currency is crumbling. Here’s why.

2.1 Trade deal limbo with the US and harsh tariffs

India remains one of the few major economies without a trade deal with the US, and negotiations that were expected to soften steep tariffs have stalled. ^[10]
US duties of up to 50% on some Indian exports are still in place, hurting competitiveness and dampening expectations for future export growth. ^[11]
October’s merchandise trade deficit surged to a record above $40 billion, worsening India’s balance of payments and intensifying underlying demand for dollars. ^[12]

In short: the trade drag is overwhelming the growth story. Strong domestic GDP numbers are not enough to offset weaker trade and tariff headwinds.

2.2 Foreign investors are pulling money out

Foreign investors have withdrawn roughly $16–17 billion from Indian equities in 2025, making equity flows one of the biggest pressure points for the rupee. ^[13]
Net foreign direct investment (FDI) has turned weak, even negative in some months, as large exits through IPOs and secondary sales have outweighed fresh inflows. ^[14]
External commercial borrowing and NRI deposit inflows have slowed, sapping traditional sources of hard‑currency funding. ^[15]

The result: the capital account is under strain at the same time that the trade deficit is widening, forcing the rupee to “absorb the shock” via depreciation.

2.3 Widening trade deficit and softer external borrowing

Alongside the record trade deficit, economists expect the current account deficit to widen to around 1.4% of GDP this fiscal, up from 0.6% last year, as imports outpace exports. ^[16]
Importers – especially in sectors like oil, electronics and fertilisers – have stepped up their dollar buying and hedging, adding to spot demand for USD/INR. ^[17]

2.4 RBI’s “crawl‑like” FX regime and lighter intervention

In November, the IMF reclassified India’s exchange‑rate framework from “stabilised” to “crawl‑like”, effectively acknowledging that the rupee is now allowed to move more flexibly, with only occasional intervention. ^[18]
Traders say the RBI has intervened in short, staggered bursts rather than mounting a sustained defence of any particular level, including 90, focusing instead on preventing disorderly volatility. ^[19]
India still has a formidable FX reserve stockpile of roughly $690 billion, but policymakers appear more willing to let the rupee adjust gradually to changing fundamentals rather than burn reserves to defend a round number. ^[20]

This marks a philosophical shift from the “defend every level” playbook of earlier episodes (like the 2013 taper tantrum) to a framework where the rupee is allowed to act as a “shock absorber.” ^[21]

2.5 Hedging costs jump as markets bet on more weakness

As the rupee approached 90 earlier this week, hedging against further depreciation became noticeably more expensive. ^[22]
The one‑year USD/INR forward premium rose by over 12 basis points across three sessions, and the one‑month premium hit its highest level in nearly seven months, signalling intense demand for protection – and for speculative short‑rupee trades. ^[23]
Market participants say the break of the long‑defended 88.80 level altered sentiment: traders who previously hesitated to bet against the RBI now feel emboldened to challenge it, especially around the 90 mark. ^[24]

Put together, these forces have turned the rupee into a one‑way trade for many investors, at least in the short term.

3. Rs 90 to a Dollar: How It Hits Households, Students and Travellers

The fall of the rupee is not just a story for forex charts or trading rooms. The move past 90 will directly show up in bills, EMIs and budgets in the coming months.

Drawing on official data and explainers published on 3 December, here’s how. ^[25]

3.1 Fuel, cooking gas and everyday inflation

India imports about 85–90% of its crude oil, along with a large share of LPG and edible oils. A weaker rupee raises the rupee cost of every imported barrel or tonne, even if global dollar prices stay flat. ^[26]
That means petrol, diesel and cooking gas become more expensive over time, either through direct price hikes or via higher subsidies and fiscal pressure.
Since transport and energy input costs feed into everything from food to manufactured goods, a sustained ₹90+ rate adds to inflation risks in 2026.

3.2 Electronics, cars and imported goods

Big‑ticket items like smartphones, laptops, consumer appliances and some car models rely on imported components or are fully imported.
A weaker rupee widens the landed cost, prompting companies to either raise sticker prices or trim features and margins. For consumers, that means fewer discounts and more expensive upgrades over the next few quarters. ^[27]

3.3 Studying and travelling abroad just got pricier

The hit is especially sharp for students and families dealing with dollar‑linked expenses:

Tuition fees of $50,000 a year that were roughly ₹40 lakh when the rupee was at 80 now translate to about ₹45 lakh at 90, a jump of around ₹5 lakh a year. ^[28]
Families repaying dollar‑denominated education loans see their rupee liability rise by 10–15% compared to when they borrowed at stronger exchange rates.
Foreign holidays get more expensive too. A $2,000 family trip that used to cost about ₹1.6 lakh at 80 now runs closer to ₹1.8 lakh at 90, before accounting for inflation in airfare and hotels. ^[29]

3.4 Remittances: Pain for some, gain for others

There is one clear group of winners: households that receive money from relatives working overseas.

India received an estimated $130+ billion in remittances in 2024, and every dollar now converts into more rupees at home. ^[30]
Someone sending $500 a month now delivers around ₹45,000 instead of ₹40,000 – a meaningful boost for families using remittances to fund education, healthcare or property purchases. ^[31]

4. Market Winners and Losers as INR Slides Past 90

4.1 Exporters: IT and pharma cheer (cautiously)

IT services, BPO and other export‑heavy firms that earn in dollars but pay costs in rupees generally benefit when the rupee weakens.
On Wednesday, the Nifty IT index outperformed the broader market, as investors bet that fatter foreign‑currency revenues will lift margins for software exporters. ^[32]
However, many large IT firms hedge a portion of their forex exposure, so the gains are moderated. And global demand conditions still matter more than FX alone.

Pharmaceutical and speciality‑chemical exporters also enjoy a tailwind from a weak rupee, though higher import costs for raw materials can offset part of the benefit. ^[33]

4.2 Import‑dependent sectors under pressure

On the losers’ list:

Oil marketing companies, airlines and logistics firms face higher dollar bills for fuel, squeezing margins unless they can pass on costs to consumers.
Auto makers and electronics manufacturers that rely on imported components see cost pressures build up.
Sectors with large foreign‑currency debt must manage higher rupee repayments and potential balance‑sheet stress if the rupee remains weak. ^[34]

4.3 Dalal Street’s mood: Nervous, not panicked – yet

Business Standard and Economic Times reports note that while the rupee has fallen sharply, equity corrections so far have been modest – in the low single digits from recent highs. ^[35]
Strategists point out that corporate earnings and growth remain robust, but they also warn that persistent rupee weakness can:
- keep foreign investors on the sidelines,
- raise imported inflation, and
- force the RBI into a tighter policy stance later than markets currently expect.

5. What Happens Next: RBI Meeting, Trade Talks and the Road to 91

5.1 All eyes on Friday’s RBI policy meeting

The RBI’s Monetary Policy Committee (MPC) meets later this week, and markets now see the press conference as a key event for rupee guidance. ^[36]
While most economists expect policy rates to remain unchanged, traders will parse the central bank’s language on:
- the rupee’s role as a shock absorber,
- how actively it plans to intervene in FX markets, and
- whether it is comfortable with ₹90+ levels or not.

Some analysts argue that the RBI must signal a clearer line in the sand to prevent one‑way speculative bets taking USD/INR quickly towards 91 or higher. ^[37]

5.2 Could a trade deal rescue the rupee?

Across NDTV, Economic Times and other outlets, a common refrain emerges: the single biggest swing factor for the rupee now is the India–US trade deal. ^[38]

Several analysts say the rupee could stabilise – and even claw back some losses – if a credible deal is signed soon, particularly if it rolls back the harshest tariffs.
Others caution that even a deal may not reverse the entire 2025 weakness, given structural issues such as:
- a wider current account deficit,
- still‑soft FDI inflows, and
- global investors’ preference for other Asian markets.

The timing and scope of any agreement therefore matter as much as the headline announcement.

5.3 How far could the rupee fall?

Forecasts vary, but the tone is clearly cautious:

Economists at a major foreign bank cited by Reuters expect USD/INR to drift toward ~91.30 by the end of next year if there is no meaningful tariff relief. ^[39]
A domestic brokerage quoted by Economic Times sees the pair trading in a broad 88–91 range for the rest of the current fiscal, with the bias tilted toward the weaker side unless flows improve. ^[40]

For now, most strategists agree on one thing: the direction of travel remains down for the rupee, unless there is a positive surprise on trade or policy.

6. What Individuals and Businesses Can Do Now

This section is for information only and is not personalised financial advice, but it reflects the practical steps many experts are recommending in today’s coverage. ^[41]

6.1 For households and students

Budget with a weaker rupee in mind
When planning overseas education, travel or large imported purchases for 2026, assume ₹93–95 per dollar rather than the current spot rate, to build a safety cushion. ^[42]
Avoid taking unhedged dollar loans if you earn in rupees
A further slide in the rupee directly increases your EMIs in rupee terms.
Stagger foreign‑currency expenses
If possible, split tuition or large payments across tranches rather than paying everything at a single rate spike.
Use simple hedging tools where appropriate
Banks and authorised dealers offer forward contracts or structured remittance plans that can smooth exchange‑rate shocks, especially for known expenses like annual fees. ^[43]

6.2 For small businesses and importers

Lock in key costs
Consider using FX forwards to fix exchange rates for confirmed import orders, particularly in high‑margin or price‑sensitive sectors.
Re‑negotiate contracts where possible
Explore invoicing more export contracts in foreign currency, or using hedging clauses on long‑term deals.
Diversify sourcing and markets
Firms relying heavily on dollar‑priced inputs can look at non‑dollar suppliers or local substitutes, while exporters might diversify target markets in case US demand slows due to tariffs.

7. The Bottom Line

The rupee’s breach of ₹90 per US dollar on 3 December 2025 is much more than a symbolic milestone. It’s the visible result of:

stalled trade negotiations with the US and steep tariffs,
record trade and current‑account gaps,
billions of dollars in portfolio and FDI outflows, and
an RBI strategy that prioritises gradual adjustment and low volatility over hard defending any one level. ^[44]

For households, ₹90 to a dollar means higher fuel and import‑driven inflation, costlier foreign education and travel, and a need to plan finances around a structurally weaker currency. For exporters and remittance receivers, it offers an opportunity – but even they must navigate an environment shaped by tariffs and global uncertainty.

What happens next will hinge on two big dates: the RBI’s policy announcement on Friday and any concrete breakthrough in India–US trade talks later this month. Until then, the rupee is likely to remain under pressure – and Indians at home and abroad will feel every tick of USD/INR a little more personally than before. ^[45]

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