Archive · 1 Jan 2026
Rupee Depreciates Amid Economic Uncertainties
The Indian rupee has been getting weaker against the US dollar, reaching a record low of ₹90.02 in December 2025.
This means that now, one US dollar can buy more rupees than before.
The main reasons for this are uncertainties in trade deals with the US, a lot of money being taken out by foreign investors, and a strong demand for dollars.
The RBI, which is like the boss of all banks in India, says that while the Indian economy is still growing strong, there are some risks that could cause problems.
They warn that if there are sudden changes in the US stock market or more trade tensions, it could make things harder for India's economy.
The RBI also says that banks should be careful and not take too many risks.
Despite these challenges, the RBI believes that the rupee will recover in 2026 as the economy continues to grow.
The Indian rupee reached a historic low of ₹90.02 against the US dollar in December 2025, depreciating by over 5% in the year.
Key drivers of the rupee's weakness include uncertainties over US-India trade deals, a widening trade deficit, and foreign investor outflows.
The RBI warns of risks to financial stability, including geopolitical tensions, trade uncertainties, and potential US equity market corrections.
Despite the rupee's depreciation, India's economic fundamentals remain strong, with GDP growth projected at 7.4% for FY26 and 6.6% for FY27.
Banks are tightening compliance checks on overseas remittances, demanding more extensive documentation from NRIs and businesses.
- Who
- Reserve Bank of India (RBI), Non-Resident Indians (NRIs), Foreign Portfolio Investors (FPIs)
- What
- Rupee depreciation and economic risks
- When
- December 2025
- Where
- India
- Why
- Geopolitical tensions, trade uncertainties, and foreign investor outflows
- Rupee Value
- ₹90.02 per USD (December 3, 2025)
- Yearly Depreciation
- 5%
- Foreign Portfolio Investments
- $18.9 billion outflows in 2025
- GDP Growth Forecast
- 7.4% for FY26, 6.6% for FY27
- Inflation Rate
- 0.70%
- Repo Rate
- 5.25%
- LRS Limit
- $250,000 per year
Sources
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