Rupee Falls, Touches 90 to a Dollar in a First in 75 years
New Delhi: The rupee crossed the Rs 90 to a dollar price-level for the first time ever on Wednesday, December 3, falling 6 paise to 90.02 in early trade, reported agencies.
This was as banks kept buying US dollars at higher levels. Foreign Institutional Investors (FIIs) outflows continued to drag it down further.
The Rupee closed at a historic low on Tuesday itself, at Rs 89.96 to a greenback, continuing to fare much worse than other Asian currencies, the Chinese Yuan and the Indonesian Rupiah, and being seen as the Asian laggard.
According to forex traders, “a weaker dollar index and a fall in global crude oil prices cushioned against a steeper decline”, which was otherwise expected.
The Rupee had slipped to a record intra-day low of Rs 90.15 to a dollar before recovering somewhat, to trade at 90.02. This is 6 paise beneath the previous amount it closed on.
This rupee rate may be seen as good news for exporters, but given India’s high trade deficit, not seen to be coming down in the near future, this makes imports, often essentials more expensive.
A steep decline in the Rupee has taken place in the background of the Reserve Bank of India (RBI) putting in a lot of money and attention to help shore up the currency. Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP, told the Press Trust of India that the Rupee “might hit 91 levels in this cycle if the RBI support eases at 90.”
Businessline had reported last week that RBI’s forex interventions to back the rupee had surged to as much as $26 billion between September and November 2025. The Rupee has been an index of India’s economy being under a cloud especially this year since tariff uncertainty kicked in, there were hiring freezes and the job slowdown hit even the salaried white collar class in the country.
Reuters has cited the absence of RBI support during the day and quoted Sat Duhra, portfolio manager at Janus Henderson Investors in Singapore as saying, "The weak macro picture in India makes weak currency performance inevitable, there has been a slide in so many data points recently – rising trade deficits, weakening nominal GDP growth, weak FDI and foreigner selling down domestic equities, etc.”
The value of the Rupee has come down 6.5% since May this year, marked a significant decline.
PTI has reported that FIIs have sold equities worth Rs 3,642.30 crore on Tuesday, December 2.
The depreciating Rupee during Dr Manmohan Singh’s premiership was held up as a major failing of the central government by the then chief minister of Gujarat, Narendra Modi, whose statements disparaging him personally and the UPA’s policies go viral each time the Rupee sinks. Modi had said in 2013, that the rupee and Dr Manmohan Singh had “both turned mute”.
The Rupee-dollar exchange rate had been seen as a political talking point but since Modi assumed charge, it has not found favour as a topic of conversation in the same quarters. Godman-businessperson Sri Sri Ravishankar had bet that Modi’s prime ministership would bring the dollar to cost just Rs 40.
It is refreshing to know that the rupee will get stronger at Rs.40/- per dollar if Modi comes to power http://t.co/OacZDXesGy
— Gurudev Sri Sri Ravi Shankar (@Gurudev) March 20, 2014
There has been no word from Sri Sri Ravishankar since the Rupee has fallen to well over twice that amount.
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