'Anti-poverty, not anti-national': Financial expert warns Indians on one-currency risk as rupee sinks to record low

The Indian rupee recently plunged to ₹88.5 against the US dollar, marking its weakest level in history. While most headlines framed this as a crisis, Sharan Hegde, Founder and CEO of getonepercent, argues that the fall carries not only risks but also important lessons for Indian investors.

Concentration risk

“Brutal truth: If you're only investing in India, you're betting your entire financial future on ONE currency,” Hegde wrote in a detailed post on X (formerly Twitter).

He cautions that investors often mistake such exposure for patriotic loyalty when in reality it amounts to concentration risk. By tying all investments to the rupee, investors risk long-term erosion of wealth in global terms — even if domestic returns look good on paper.

Why Rupee is falling

Hegde notes that the rupee’s depreciation is not random, but the outcome of several macroeconomic pressures:

• Foreign capital outflows: Overseas investors have pulled out nearly ₹4 lakh crore from Indian equities this year.
• Global trade disruptions: Ongoing US tariff concerns have created volatility in India’s trade flows.
• Domestic fiscal stress: Rising deficits and fiscal pressures continue to weigh on India’s financial stability.

The paradox, he adds, is that this has happened even as the US dollar itself has weakened. The Dollar Index fell from 110 to 98 this year, yet the rupee still lost ground. “When you’re losing to a weakening currency, that tells you everything,” Hegde emphasises.

The currency math 

A common misunderstanding is that currency movements are symmetrical. Hegde clarifies with an example:

• If the rupee goes from ₹100 to ₹150 per dollar, the dollar strengthens 50%.
• But the rupee only weakens 33%.

This asymmetry, while technical, has profound effects on how portfolios grow over time. Small percentage losses in currency can compound into massive wealth erosion across decades.

Winners and losers in a weak rupee

A falling rupee doesn’t hit all sectors equally. Some industries gain competitiveness abroad, while others see their costs soar.

• Winners: IT services, Pharmaceuticals, Textiles and export-heavy industries
• Losers: Aviation (fuel costs rise), Electronics (import dependency), Oil & energy companies

For investors, this makes sector allocation critical during currency downturns.

Hidden tax on Indian portfolios

Hegde calls currency depreciation the “silent wealth destroyer.” Even when stock market returns look impressive in rupee terms, global purchasing power can shrink.

For example: If Indian markets deliver 100% returns in 10 years but the rupee depreciates 50% against the dollar, global wealth effectively grows only marginally.

This “hidden tax” means Indian investors can end up poorer on the world stage even while celebrating gains at home.

Building a Barbell Portfolio

To protect against this silent erosion, Hegde recommends a barbell approach:

1. 60-70% in Indian assets for exposure to domestic growth and compounding.
2. 30-40% in global assets as a hedge against currency risk.

“This isn’t anti-national,” Hegde stresses. “It’s anti-poverty.”

Tools for global diversification

Hegde points out that Indian investors already have several channels to build global exposure:

• Direct US stock investing via Indian broker platforms
• International mutual funds offered by Indian AMCs
• Global ETFs tracking international indices
• Real Estate Investment Trusts (REITs) denominated in stronger currencies

“The infrastructure is ready — most people just don’t use it,” he says.

Timing the Shift

Should investors wait for a recovery before diversifying? Hegde’s advice is clear: the best time was yesterday, the next best time is today.

“Currency is the silent wealth destroyer. While you're focused on stock picks and mutual fund returns, currency movements are eating your real purchasing power. Protect yourself before it’s too late.”