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The Indian rupee hit an all-time low against the US dollar today, December 15, reaching 90.74. Uncertainty surrounding the US trade deal and continuous outflows of foreign funds have put pressure on the rupee.
The rupee has depreciated by approximately 6% so far in 2025. On January 1, the rupee was at 85.72 against the dollar, and it has now reached 90.74.
A weaker rupee makes imports more expensive. A decline in the rupee’s value means that importing goods into India becomes more costly. Traveling and studying abroad also become more expensive.
How is the value of a currency determined?
When the value of any currency falls against the dollar, it is called currency depreciation or weakening.
Every country maintains foreign currency reserves, which it uses for international transactions. Fluctuations in these foreign reserves affect the value of the currency.
If India’s foreign reserves of dollars are equal to the US’s reserves of rupees, the rupee’s value will remain stable. If our dollar reserves decrease, the rupee will weaken; if they increase, the rupee will strengthen.
