The Rupee Roller Coaster

When the rupee falls against the dollar, the headlines often scream of crisis. “Rupee hits record low,” “Cost of imports to rise,” “Middle class will suffer”, the message seems simple: a weak rupee is bad news. But is it really that straightforward? Like any other thing it has two sides, on one side, students studying abroad feel sad as their tuition fees rise, fuel prices soar and imported gadgets and tools become more expensive. On the other side, exporters quietly rejoice, tourists find India a more affordable destination and families who get remitted money from overseas notice a pleasant surprise in their bank accounts.

The value of a currency is more than an economic figure, it is the mirror that reflects worldwide trends, domestic vulnerabilities, and the fragile balance of trade. India, with its gigantic hunger for oil, electronic products, and foreign education, certainly suffers as the rupee falls. Each rupee that falls against the dollar adds to the import bill, commonly pushing up the prices of fuel, transport, and food. Almost 88% of India's crude oil is imported, and when oil becomes more expensive, it does not merely impact petrol pumps but seeps into the cost of all commodities moved by road or air. Students whose families pay for overseas education or families dreaming up foreign vacations also feel the pinch, with rupee depreciation imposing a quiet surcharge of 10% to 15%.

But to label a weak rupee always bad misses the larger perspective. Trade in the world is competitive, and a depreciating currency is often a natural cost-cutting measure for Indian exports. This year, when the USA imposed tariffs of as much as 50% on select Indian products, the rupee's fall of almost 3.9% against the basket of Asian currencies diluted the pain. HDFC Bank economists have noted that each 1% decline in the rupee can offset GDP slowdown by 2 to 3 basis points, and thus the currency is a quiet weapon of strength. Textile, IT services, and agri-commodity exporters tend to find a competitive advantage as their products become cheaper in foreign markets, and that keeps people employed and brings in revenues.

Tourism also finds a silver lining. For the American or European tourist, the same dollar purchases more in India, making trips to Jaipur, Goa, or Kerala much more attractive. This money benefits local entrepreneurs and adds to foreign exchange reserves. On top of this is the advantage of remittances: India is the world's largest receiver, and each dollar wired home by foreign workers brings more rupees into the hands of families, stimulating domestic consumption.

As of late August 2025, the rupee hovers around ₹87.6 to ₹87.8 per dollar, close to its historic lows. The slide has been accelerated by new US tariffs, but at the same time, it has made Indian exports more competitive and enhanced remittances. India’s exports of goods and services touched about $824.9 billion in FY 2024 to 25, while imports stood higher at $915.19 billion, leaving a significant trade deficit of $91 billion. 

The Reserve Bank of India has played an active role in smoothing volatility. While it does not try to freeze the rupee at a particular level, it intervenes to prevent sharp falls. Controlled depreciation, in fact, is sometimes desirable. Analysts note that with India’s sovereign rating recently upgraded, the country may choose to let the rupee weaken modestly, cushioning tariff shocks while attracting capital inflows through its improved credit standing.

In the end, if a weak rupee is a curse or a blessing is mostly a matter of perspective. To families and businesses that rely on imports, it's like an invisible tax. To exporters, tourism businesses, and remittance receiving families, it's like a much needed boost. The reality is somewhere in the middle, the rupee is not weak or strong in itself, but a reflection of India's changing position within the global economy. If managed well, even a declining rupee can be used as a stepping stone and not a stumbling block.