Rupee at 90: Could 100 be the next stop? Data shows the risk is real

The Indian rupee continued its sharp decline on Thursday, sinking to a fresh lifetime low of 90.42 against the US dollar before recovering slightly to end the day at 89.96. This marks the third consecutive session of record lows, driven by unrelenting foreign fund outflows and intensifying pressure on India’s external balances. With the psychologically significant Rs 90 per dollar level now breached, analysts are debating whether the rupee could next drift toward Rs 100 — a threshold that could rattle markets and investors alike.

The latest depreciation stems from a notable supply–demand imbalance for dollars. India’s heavy dependence on crude oil, electronics, and gold imports continues to generate substantial dollar outflows. Compounding this, the recent drop in imports of discounted Russian oil—previously settled in non-dollar currencies—has forced refiners to switch back to dollar payments, tightening USD liquidity and weakening the rupee further.

Market analyst Alok Jain, Founder of Weekend Investing, explained in a widely shared commentary that the breach of the Rs 90 mark carries symbolic weight, even though the rupee’s decline is part of a long-term trend. “Round numbers attract more attention. The shift from 89 to 91 is not the same as crossing 90. Entering the ‘90s’ triggers a different psychological response in markets,” he noted.

Jain highlighted the rupee’s decades-long trajectory: from Rs 10 in the 1980s to Rs 20 in 1991, Rs 40 during the Asian crisis, Rs 50 after the 2008 global financial crash, Rs 60 in 2013, Rs 70 in 2018, Rs 80 during the Russia-Ukraine conflict, and now Rs 90. Apart from a brief period of appreciation between 2003 and 2007, the rupee has consistently lost 3–5% annually against the dollar.

While many assume the rupee is weakening because of global USD strength, Jain pointed out that the dollar index has actually fallen nearly 10% in 2025, meaning the rupee’s troubles are India-specific. Exports have dropped sharply—hurt by unresolved US trade tariff issues—while imports, especially gold, have surged. India imported 165 tonnes of gold in October, a 175% spike year-on-year, pushing the gold import bill for 2025 to $41 billion, up 20% over last year.

Foreign investors, who traditionally support the rupee, have pulled out nearly Rs 1.67 lakh crore from equities in 2025, weakening the currency further. Markets are also adjusting after the RBI’s prolonged intervention kept the rupee artificially stable around 81–82 for almost two years.

Jain warned that historically, when the rupee begins a sharp downward phase, the total depreciation during that cycle averages around 20%. With the current decline at only 8.8%, a further slide cannot be ruled out unless macro conditions improve.

A rapid fall toward Rs 100, he cautioned, would alarm foreign investors, potentially triggering more outflows. A slower, gradual move would be less disruptive. For households and investors, a weakening rupee erodes purchasing power and reduces real returns on domestic assets.

To hedge against currency risk, experts recommend global diversification—especially into US equities—and gold, which naturally rises in rupee terms when the domestic currency depreciates.

For now, the key question remains: Is the rupee stabilising near 90 or preparing for its next leg lower? The answer, analysts say, depends on trade negotiations, FPI flows, and whether India’s import pressures ease in the coming months.