The rupee reached its lowest level against the dollar today, December 3rd. According to reports, the rupee fell 25 paise to close at 90.21 against the dollar. Previously, it had closed at 89.96 on Tuesday.
Continuous foreign fund outflows have put pressure on the rupee. The rupee has weakened by 5.26% so far in 2025. On January 1st, the rupee was at 85.70 against the dollar, and has now reached 90.21.
The rupee’s fall will make imports more expensive. A fall in the rupee means that imports will become more expensive for India. Furthermore, traveling and studying abroad have also become more expensive.
Consider that when the rupee was 50 against the dollar, Indian students in the US could get 1 dollar for 50 rupees. Now, students will have to spend 90.21 rupees for 1 dollar. This will make everything from fees to accommodation and food and other things more expensive for students.
How is the value of a currency determined?
If the value of any currency decreases compared to the dollar, it is called currency falling, breaking, or weakening. This is called currency depreciation.
Every country has foreign currency reserves, through which it conducts international transactions. The effect of increasing or decreasing foreign reserves is visible on the currency price.
If the dollar reserves in India’s foreign reserves are equal to the US rupee reserves, then the value of the rupee will remain stable. If the dollar reserves with us decrease, the rupee will weaken; if the rupee increases, the rupee will strengthen.
