There was a time when the increased prices of petrol and diesel were visible in the daily news, whether wanted or not. At that time, a joke was popular that a biker was saying that what should I do if the price of petrol is increasing, I used to get petrol worth Rs. 100 earlier and even now I get petrol worth Rs. 100 only… While saying this, he also knew that what he was saying was nothing but stupidity, but he was not ready to accept it in front of everyone. Now petrol and diesel rates are missing from the news and their place has been taken by the falling rupee, which is setting new lows every day. And now again the same joke is going on that what should I do if the rupee falls, earlier too I used to get my salary in rupees and spend my money only in rupees, even now I get my salary in rupees and spend my money only in rupees.
But the speaker also knows that what he is saying is nothing but nonsense. So the question is, for how long will such stupid things continue to be said and for how long will the rupee keep falling lower and lower, what is the reason for it falling so low and is there any breaker where it will be able to stop?
This is the era of AI, so to get the answer to any of our questions easily, we either ask Chat GPT or Google Gemnai. I also first asked the same question to Google Gemnai that how much more will the rupee fall. The conclusion that Google Gemnai gave after extensive knowledge and if-buts was that-
‘At present the rupee is in ‘uncharted territory’ i.e. unknown area.
ChatGPT also gave a broad reply that it is difficult to say. Now this problem has been made a little easier by a meme, which is viral on social media. It is being said that America’s STD code is 1, while India’s STD code is 91. Same is the condition of rupee, because one dollar of America has now become equal to 91 rupees. The meme tells that in 1947 one dollar was equal to one rupee. Although this is not true. This is actually a joke, because one rupee was never equal to one dollar.
No government data even confirms this. In fact, Thomas Cook is one of the oldest travel companies in the world. Old because it started in 1881. This company also provides foreign exchange service. That means rupee for dollar and dollar for rupee. The data available on the website of this company tells that at the time of independence, the value of 1 dollar was 3 rupees 30 paise. Today the value of one dollar is around Rs 91. So even jokingly one rupee was never equal to one dollar.
Well coming to the real issue. Why did the rupee fall, what is its impact on you and where will this fall stop? So let’s try to find the answer to each question.
And let’s start it with a graph. When India became independent in the year 1947, one dollar of America was equal to three rupees 31 paise of India. In this you can clearly see that at the time of independence, the value of one dollar was 3 rupees 31 paise. But the biggest decline happened in 1966, when India was facing economic crisis. Then the rupee was devalued and that year the value of one dollar reached ₹7.50 in Indian rupees.
A big change also came in 1991 when liberalization took place. And then for the first time the dollar crossed Rs 20. From 2000 to 2010 i.e. for about 10 years, there was no major change in the price of dollar and it remained between 40 to 50 rupees. Then came 2012. And after that the story of rupee changed. There was a continuous decline and the result is that when the year 2025 was about to end, one dollar had crossed Rs 91, which is the highest low of the rupee.
The question is why. So there are four-five main reasons for this. Even if you know, it is important to tell. So know this.
Migration of foreign investors:
In technical terms it is called FPI Outflow i.e. Foreign Portfolio Investment Outflow. Foreign investors are withdrawing their money from the Indian stock market and investing it in safe havens like America. When such investors withdraw money from India, they sell rupees and buy dollars. This increases the demand for dollars and the rupee naturally weakens. If we talk about the figures, then in the year 2025 alone, about 18 billion dollars have been withdrawn from the Indian market, which is having a direct impact on the rupee.
Uncertainty in US-India trade deal:
America has imposed tariffs on India. Because of this, the business relations between America and India have been affected. And this is when there is talk of trade deals every day. Until a trade deal is made, nothing is decided. And this uncertainty has greatly weakened the rupee. Due to America’s new trade policies and tariffs, other markets of the world are scared. The result is that the rupee has become the worst performing currency in the whole of Asia this year.
Increase in import bill:
India imports more than 80% of its oil needs and a large amount of gold. Their prices are continuously increasing in the international market. Because of this we have to pay more dollars.
New policy of RBI:
Generally what happened was that if the dollar started getting stronger, the Reserve Bank would sell some dollars of its reserves, which would give the rupee a chance to stabilize. But this time RBI has left the rupee in the hands of the market. And is trying to save the dollar so that Indian exports can benefit.
Now these are words of knowledge. By now you know why your rupee is falling so much. But the real question still remains that what is the impact of this falling rupee on our lives. So the answer to this is also very simple.
And the answer is that whenever the rupee falls, everything coming from abroad becomes expensive. Understand it this way, if we have to buy any goods from America and its value is 1 dollar, then we will have to pay about 90 rupees to America for it. If rupee becomes stronger against dollar then we can get the same thing at 85-80 against 90 rupees. Let’s understand a little more clearly.
You use petrol and diesel every day. And it is made from crude oil. India buys 80 percent of its crude oil needs from abroad. Whatever crude oil India buys, it buys it in dollars. If dollar is expensive then oil is expensive, if oil is expensive then the milk, vegetables, gas cylinder and every other daily item reaching your home will be expensive. Secondly, mobile phones and gadgets that come from abroad will be expensive because the dollar is expensive. And if your child is studying abroad, then his fees will be expensive because you will be paying the fees in dollars. And you will get expensive dollar.
You will have to loosen your pockets more. Therefore, do not fall into any such illusion that if the rupee is falling then what should I do? It is affecting you too. Yes, those people are ineffective or should we say, those people are profitable, who are either working abroad or working in foreign companies while living in India. Because their salary comes in dollars. And when they exchange dollars into rupees, they get higher salary than before because the dollar is expensive.
Now the last question is how much more will this rupee fall and where will it stop. So no one can give a correct answer to this. If the trade deal between America and India is finalized and on India’s terms, then perhaps the rupee will rise soon. Otherwise, it is even being estimated that at the beginning of next year you may have to pay more than Rs 92 for one dollar. However, State Bank of India estimates that the rupee will appreciate in the year 2026 and it may become stronger against the dollar and reach Rs 87 per dollar.
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