Historical Devaluation of Indian Rupee

 value of the Indian rupee has fallen to a record low of 90.43 per US dollar in December 2025 The rupee has fallen by 5% so far in 2025, making it Asia's worst-performing currency.Continued withdrawals by foreign portfolio investors (FPIs)Demand for safe-haven assets in the dollar due to global geopolitical risksUncertainty regarding the India-US trade deal Rising imports of gold, electronics, and machineryHigh Brent crude prices and a widening trade deficit Decline in exports and increase in imports Negative EffectsWeakening foreign investor confidence increases the risk of capital outflows and increases the burden of external debt.  Increasing fiscal pressures can limit development spending. Ultimately, this adversely impacts economic stability, growth rates, and consumer welfare.Promoting rupee-based trade agreements and local currency settlements (LCS) to reduce dependence on the dollar. Developing a global rupee market so that international banks can transact 24 hours a day.Inclusion of G-secs in global bond lists and expansion of Masala bonds to attract foreign investment.Maintaining stability through currency swap agreements, liquidity support, and cautious intervention through the RBI.Diversifying high-value manufacturing and export markets to enhance export competitivenessLimiting gold imports through digital gold options Increasing global acceptance of the rupee through UPI international expansion and preparations for SDR inclusion These measures can ensure rupee strength, external sector stability, and long-term sustainability of the Indian economy.