Rupee vs Dollar: The Indian currency rupee is continuously weakening against the dollar. On Friday, the rupee fell by 22 paise to 90.20 dollars. This means that now you will have to spend more than 90 rupees for one dollar. However, a day before this on Thursday, an increase of six paise was seen in the rupee and with this it reached 89.92 against the US dollar. Due to the increasing demand for the dollar among importers and low liquidity, the dollar is continuously rising against the rupee.
Earlier, public sector banks sold US dollars to RBI, so this helped in controlling the rupee to some extent. But again due to increasing demand among oil importers, the dollar again became stronger against the rupee. At present, the market’s focus remains on currency fluctuations and RBI intervention, which includes FX swaps and liquidity operations.
5% decline in 2025
In the year 2025, the rupee fell by 5 percent against the US dollar, which was its worst performance since 2022. However, SBI has predicted that this is expected to change in 2026. According to a recent report by SBI Funds Management, the currency was under pressure last year due to continuous selling by foreign investors, reduced pace of exports and increased hedging demand from importers.
Foreign investors pulled out about $18 billion from Indian equities citing declining earnings, limited participation in AI-led global growth and better opportunities in other emerging markets. Last year, when the dollar weakened and most global currencies strengthened, the rupee still remained weak due to all these reasons.
Will the situation improve in future?
In the next financial year, the rupee will fall by about 2 percent and the exchange rate will be around 92 against the US dollar. It will be supported by many important factors. SBI said in its report that due to strong service exports and low crude oil prices, India’s current account deficit is likely to be less than 1 percent of GDP. Inflation is expected to remain close to RBI’s target of 4 percent, which will help the currency recover from any major shock.
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