New Delhi: A depreciating rupee will help exporters and the IT sector, but make imports costlier, thus fuelling inflation, according to experts.
As the rupee plunged below 90-mark to a US dollar, opposition parties raised concern over its impact on common citizens. The matter was also raised in Parliament.
The rupee rebounded from its all-time low levels and appreciated by 19 paise to close at 89.96 against the US dollar on Thursday, on softness in the US dollar index and on reports of the Reserve Bank of India’s supposed intervention.
Forex traders said the greenback fell after ADP non-farm payroll data came in sharply below the forecast, and the softness in the US dollar index supported the rupee at lower levels.
The rupee opened weak earlier in the day and touched an all-time low of 90.43 amid selling pressure from foreign investors and rising crude oil prices. The delay over the announcement of the India-US trade deal has also weighed on the rupee.
“The rupee’s fall below 90 against the dollar brings mixed consequences. While export sectors like IT and textiles gain competitiveness, higher import costs for crude and raw materials will squeeze margins and widen the trade deficit,” said Rajeev Sharan, Head, Criteria, Model Development & Research, Brickwork Ratings.
He also said that rising inflationary pressures could dampen consumer demand and corporate profitability, while firms with unhedged foreign borrowings may face financial stress.
Congress President Mallikarjun Kharge took a swipe at Prime Minister Narendra Modi over the rupee crossing the 90-mark against the US dollar, recalling that as Gujarat chief minister he had questioned the UPA government over the declining value of the currency.
“Before 2014, Modi ji said – ‘What is the reason that India’s rupee is getting ‘patla (losing its value)’, you will have to answer this. The country is demanding an answer from you’. Today, we are asking Modi ji the same question. He will have to answer,” Kharge said.
Earlier, speaking with reporters in Parliament, Kharge said since the value of the rupee is declining, it means that the economic situation of the country is not good.
His party colleague and Rajya Sabha MP Vivek K Tankha expressed concern over the sharp depreciation of the Indian currency, saying its fall has created economic pain for the common people.
“I am talking about something which is very topical. The free fall of the Indian rupee and the widening economic pain for the ordinary Indian. The rupee has crashed, past 90 per US dollar… The weakest in Indian history,” he said in the Rajya Sabha.
He said a weakening rupee raises the cost of imports, which in turn adds to inflation, affecting the poor and middle class, as well as Micro, Small and Medium Enterprises (MSMEs).
Also, exporters do not benefit much because many export sectors, such as textiles, chemicals, and engineering, rely heavily on imported intermediates.
“For the common person, the falling rupee feels like a salary cut without the employer even informing you, your money buys less every day,” the Congress MP said.
Prodigy Finance, an international student lender, said students who are going for higher studies abroad in 2026 will run into a tougher reality.
The combination of a weakening rupee, rising overseas living costs and underestimated budgets is creating a financial risk that families can no longer ignore, it said.
When tuition fees, deposits, and day-to-day living costs abroad are priced in dollars, pounds, or euros, an Indian rupee (INR) loan becomes heavier with every movement in the exchange rate. What looks manageable today can turn into an unexpected financial strain by the time repayments begin.
“The one piece of advice I always give is simple: do not pledge your home or land as collateral. You never know what the market will look like back home,” said Sonal Kapoor, Global Chief Business Officer at Prodigy Finance.
Meanwhile, a report by DBS Bank said that in the past fortnight, the central bank’s strong presence across spot, forwards and the NDF markets had prevented a break in the USDINR past 89.00, drawing a de facto line in the sand.
However, the swift move past 90/USD this week could be interpreted as a shift in the response function to allow the unit to find its new equilibrium to better reflect underlying macro shifts.
The need to maintain the currency at competitive levels stems from a delay in the US-India trade deal, unfavourable tariff differentials at this juncture, weak equity portfolio flows and a broader focus on manufacturing/ exports, it said.
Forex traders said multiple pressures, like foreign fund outflows from equities and lingering uncertainty over the Indo-US trade deal, are keeping investor sentiment fragile.
