The Indian rupee has recently weakened significantly against the US dollar — a reminder of the dollar’s global pull.
- On 3 December 2025, the INR slid past the psychological ₹90 per USD mark for the first time ever. (Times of India)
- The depreciation is steep: from around ₹ 88 in mid-November to ≈ ₹ 90 — a drop of more than 2-3% in just weeks. (Times of India)
- Analysts point to a combination of factors: weak foreign capital flows, trade-deficit pressures, global dollar strength, and domestic macroeconomic adjustments as drivers. (Reuters)
What This Depreciation Indicates
- Safe-Haven and Reserve Status of the Dollar
The INR’s decline reinforces why global investors favour dollar-denominated assets, which offer unmatched liquidity, stability, and safe-haven appeal compared with most alternatives.
- Currency Dependence Risks
Countries with high import requirements — especially for oil, commodities, and technology — experience rising costs when their currencies depreciate. This increases reliance on the US dollar for trade and settlement.
- Limitations of Alternatives
Even major emerging markets such as India, with strong growth and expanding trade networks, can face currency pressure during periods of global risk aversion or US monetary tightening. This illustrates the challenge any other currency faces in trying to match the scale, trust, and convertibility of the dollar.
- Supports the “Multipolar-but-Dollar-Core” Outlook
The rupee’s depreciation suggests that while regional currencies, local settlement systems, and digital alternatives may gradually rise, the US dollar continues to serve as the central pillar for most global trade, finance, and reserves.
Broader Implications
The recent drop of the Indian rupee below ₹90 per USD is not merely a short-term market fluctuation, but a reflection of the structural forces that continue to define the international monetary system.
India’s economic fundamentals remain broadly stable, yet the episode shows that even large, fast-growing economies remain exposed to global capital flows, the direction of US monetary policy, and the broader centrality of the dollar.
Until the global financial architecture becomes more diversified — in terms of reserve currencies, settlement systems, and commodity pricing — the US dollar will continue to function as the world’s main monetary anchor.
The rupee’s depreciation underscores a broader reality: the world is gradually becoming more multipolar, yet the dollar remains firmly at the core.
