INR Hits 90 Against the Dollar: What It Means for RBI’s Policy Decisions
The Indian rupee hit a historic low against the US dollar, crossing the 90-mark, as the Reserve Bank of India (RBI) prepares for its bi-monthly Monetary Policy Committee (MPC) meeting starting today, December 3. Experts say the currency’s sharp fall is likely to remain a key concern.
Jateen Trivedi, VP Research Analyst at LKP Securities, added that muted RBI intervention has contributed to the rupee’s rapid decline. Markets are now watching the December 5 policy announcement for signals on whether the central bank will step in to stabilize the currency.
RBI Governor Sanjay Malhotra has repeatedly stressed that the central bank does not aim for a fixed rupee level, focusing instead on curbing extreme volatility. He noted that the rupee’s current weakness reflects natural market dynamics, and an annual depreciation of 3-3.5% aligns with long-term trends. This approach gives the RBI flexibility to support growth through potential rate cuts without committing to defending the currency.
Data from Bloomberg shows the rupee has fallen 5.08% between December 31, 2024, and December 3, 2025, making it the worst-performing Asian currency after the Indonesian rupiah (down 3.17%). Other Asian peers, including the Philippine peso (-1.54%) and Hong Kong dollar (-0.18%), have fared better. Among emerging markets, the rupee ranks third worst after Argentina’s peso (-29.18%) and the Turkish lira (-16.69%).
As the MPC deliberates today, investors will be watching closely to see if the RBI steps in or lets market forces guide the rupee’s next move.
RBI’s Soft-Touch Approach to the Rupee
Analysts suggest the RBI may allow some depreciation with limited intervention. “The RBI, it seems, is adopting a more soft touch approach to intervention, given that it is already considerably short in forward contracts, including NDF (Non-Deliverable Forward) . It may therefore want to use its intervention power judiciously,” said Abhishek Goenka, Founder & CEO of India Forex Asset Management-IFA Global.Jateen Trivedi, VP Research Analyst at LKP Securities, added that muted RBI intervention has contributed to the rupee’s rapid decline. Markets are now watching the December 5 policy announcement for signals on whether the central bank will step in to stabilize the currency.
Rupee Depreciation: How India Compares Globally
Persistent equity outflows and uncertainties around the India-US trade deal have pressured the rupee, which opened the day at its lowest-ever level. While the MPC meeting will discuss interest rates on December 5, experts expect the RBI to acknowledge the depreciation without targeting a specific rupee level.RBI Governor Sanjay Malhotra has repeatedly stressed that the central bank does not aim for a fixed rupee level, focusing instead on curbing extreme volatility. He noted that the rupee’s current weakness reflects natural market dynamics, and an annual depreciation of 3-3.5% aligns with long-term trends. This approach gives the RBI flexibility to support growth through potential rate cuts without committing to defending the currency.
Data from Bloomberg shows the rupee has fallen 5.08% between December 31, 2024, and December 3, 2025, making it the worst-performing Asian currency after the Indonesian rupiah (down 3.17%). Other Asian peers, including the Philippine peso (-1.54%) and Hong Kong dollar (-0.18%), have fared better. Among emerging markets, the rupee ranks third worst after Argentina’s peso (-29.18%) and the Turkish lira (-16.69%).
As the MPC deliberates today, investors will be watching closely to see if the RBI steps in or lets market forces guide the rupee’s next move.
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