Why is Indian rupee continuously falling? Know 6 major factors and impact on Indian households

The Indian rupee has fallen for the fourth consecutive session today, hitting an all-time low of the 91 per dollar mark in the afternoon session. Falling to this lowest mark can be due to several factors including tariff pressures from Washington, which still impact India's trade growth and capital inflows. Some of the other reasons include high demand for dollars and constant selling by foreign investors which have been affecting the Indian rupee. 

The Indian rupee fell to a new low of 90.78 on Monday, registering a loss of 29 paise over its previous close. On Tuesday, the rupee plunged 9 paise to a record low of 90.87 against the US dollar in early trade, and it continued to fall, breaching the 91 mark to reach 91.14, an all-time low mark.    

Last week, December 11, the Indian rupee came down to Rs 90.42 per US dollar before which, December 2, it again fell to 89.75 per US Dollar.  

Why is rupee continuously falling? 

There are 6 reasons triggering the fall in the rupee: 

-US tariffs: Trade negotiations with the US failing while the continuation of 50% US tariffs on Indian exports, both of which took the confidence of investors and business players away.  

-Even with steady inflation and GDP growth, foreign investors have taken away USD 17 billion from Indian equities in 2025, which put more pressure on the rupee.  

-The International Monetary Fund (IMF) categorised India's exchange rate regime from “stabilized” to “crawl-like.”  

-The weakening of the rupee is also due to a significant decrease in capital inflows and less Reserve Bank of India (RBI) intervention. 

-The IDFC First Bank said, “the shift reflects the build-up of net dollar short positions in the RBI’s forward book,” as quoted by Financial Express.   

- Talking to Financial Express, Jateen Trivedi, VP Research Analyst – Commodity and Currency of LKP Securities said, “record-high metal and bullion prices have further worsened India’s import bill.” 

How does it impact common Indians? 

This phenomenon indicates a change in how Indias see the country’s economy, and how they manage it. Due to a sharp decline in rupee, the average Indian household is the most impacted. Their basic bills, from EMIs, fuel, travel, cost of electronic appliances, and more. As India imports 90% of oil, this inflates the bills even more.