On January 13, the Indian rupee fell to a record low of 86.61 against the US dollar, dropping by 57 paise. Experts attribute this decline to foreign investors selling in the Indian stock market and ongoing geopolitical tensions. The rupee has been weakening for some time, and a report from Nirmal Bang Institutional Equities predicts that the rupee could fall to 88 against the dollar in FY 2025-26.
The rupee first fell on December 19, 2024
The rupee has been weakening since the results of the US presidential election, and it could weaken further after Donald Trump’s inauguration on January 20. On December 19, 2024, the rupee first fell below 85 against the dollar, and in less than a month, it weakened by 1.60 rupees.
India’s foreign exchange reserves decreased
India’s foreign exchange reserves also decreased, dropping to $634.58 billion on January 3, 2025, from a record high of $ 704.88 billion on September 27, 2024.
What effects will result from a weaker rupee?
A weaker rupee means that importing goods into India will become more expensive, sending children abroad for education will cost more, and international travel will also become pricier.
Shashi Rai
