THE DEPRECIATING RUPEE AND WHAT IT MEANS FOR YOUR INVESTMENT PORTFOLIO

Rupee’s slide to the ‘nervous nineties’ rattled investors, even as RBI stepped in to pull it back

- JOYDEEP SEN

The Indian rupee briefly touched its international dialling code—91—against the dollar in mid-December 2025.

It has since pulled back, but the so-called “nervous nineties” still make investors uneasy about where the rupee is headed. The retreat from the all-time low beyond 91 was reportedly aided by Reserve Bank of India (RBI) intervention, with the central bank supplying dollars to the system.

To put it in perspective, consider the pace of depreciation over time. Around 2000, the rupee was near 45 to the dollar, and has since depreciated at roughly 3% a year. Look further back, and the picture shifts. In 1975, the rupee stood at about 10 to the dollar, implying an average annual depreciation of around 4.5%. Since Independence—when the rupee was on a par with the dollar—the long-term annual depreciation is closer to 6%.

The faster pace in earlier decades is largely a matter of arithmetic. A move from 10 to 20 represents 100% depreciation, while from 80 to 90 is 12.5%. Psychological levels—90 or 91—matter as they cross those levels for the first time, but such thresholds were always likely to be breached. In 2025, the rupee depreciated by over 5% at closing levels and more than 6% at its weakest point—well above its roughly 3% annual average over the past 25 years.