India Rupee Falls Past 90 As Outflows Batter Asian Laggard, Central Bank Staggers Defence

Introduction

In a major financial development, the Indian rupee slipped past the 90-per-dollar mark for the first time, making it one of Asia’s weakest-performing currencies this season. Persistent foreign investor outflows, global risk-off sentiment, and rising crude oil prices have put strong pressure on the currency, pushing it into uncharted territory.

The fall past 90 happened during early trading hours, triggering concern across markets and prompting the Reserve Bank of India (RBI) to step in. However, according to traders, the central bank’s intervention was measured and staggered, aimed at slowing the rupee’s decline rather than defending any specific level.

What Triggered the Sharp Fall?

Market analysts point to three major factors behind the rupee’s sudden slide:

1. Large foreign portfolio outflows from Indian equity and debt markets
2. A stronger US dollar supported by robust economic data
3. High crude oil prices and global geopolitical tensions

India, being a major importer of oil, faces additional pressure on its currency whenever global energy prices rise. Combined with foreign investors exiting emerging markets, the rupee has been under continuous strain.

RBI Intervenes but Avoids Aggressive Defence

The RBI was active in the currency market, selling dollars to ensure the fall did not turn disorderly. However, the central bank avoided a heavy-handed defence, preferring a controlled depreciation rather than burning reserves to maintain a specific exchange rate.

Experts say this strategy is consistent with RBI’s long-term approach — letting market forces determine the direction, while intervening only to prevent volatility.

Rupee Now Asia’s Worst Performer

With the latest drop, the rupee has become the weakest performer among major Asian currencies this quarter. Investors who were once optimistic about India’s economic growth are now taking a more cautious stance due to rising global uncertainty and delayed rate cuts in advanced economies.

Markets are now watching for further RBI actions and government signals as the currency continues to face downward pressure.

How This Impacts Common People

A weaker rupee has several direct and indirect effects, including:

• Costlier foreign travel
• Higher education expenses abroad
• Increased fuel prices
• Rising import costs

However, exporters, especially in sectors like IT and textiles, benefit from a weaker rupee as they earn more in domestic currency.

What’s Next?

Market watchers expect the rupee to remain under pressure unless global conditions improve. If foreign inflows pick up and crude oil stabilises, the currency may strengthen. For now, investors are bracing for more fluctuations as the RBI continues its cautious, staggered defence.

India’s macro fundamentals remain relatively strong, but global headwinds are likely to dictate the rupee’s path over the coming weeks.