Mumbai, March 20: The Indian rupee has crossed the ₹93 mark against the US dollar for the first time, opening at ₹92.92 and later slipping to ₹93.08, marking its lowest level yet. This decline adds to the challenges faced by the government and the general public alike. Understanding the reasons behind this depreciation and its impact on everyday life is crucial.
On March 20, 2026, the rupee fell by 3 paise, surpassing the previous low of ₹92.63 recorded on March 18.
Reasons for the Rupee’s Decline
1. Surge in Crude Oil Prices: Tensions in the Middle East have driven Brent crude prices to nearly $120 per barrel. Although prices dropped to around $107 on Friday, they remain high. Increased oil costs inflate India’s import bill, raising the demand for dollars and weakening the rupee.
2. Rising Demand for Dollars: Companies are purchasing more dollars due to the high import bill, putting additional pressure on the rupee.
3. Foreign Investor Sell-off: In March, foreign investors withdrew over $8 billion from the Indian stock market, marking the largest outflow since January 2025.
4. Strengthening US Dollar: Amid global uncertainty, investors are flocking to the dollar as a safe haven, further strengthening it and weakening other currencies.
Impact of the Rupee’s Decline on Your Finances
The depreciation of the rupee affects not just the government but also the common man. A weaker rupee directly influences inflation and monthly budgets.
Inflation Increases
India imports 75% to 80% of its crude oil. A weaker rupee makes oil imports more expensive. Estimates suggest that a ₹1 decline in the rupee against the dollar adds approximately ₹8,000 crore to the burden on oil companies, leading to increased petrol and diesel prices and consequently higher inflation. A 10% rise in petroleum product prices can increase inflation by about 0.8%, impacting food prices and transportation costs.
Higher Costs for Medicines and Education
Many essential medicines are imported, and a weaker rupee raises their prices. Additionally, studying abroad becomes more expensive, and travel costs increase, leading to higher expenses for accommodation and food.
Impact on Development Plans
The government provides subsidies to oil companies to ease the burden on the public. However, when the dollar strengthens, government expenses rise, potentially leading to cuts in spending on development projects like roads, health, and education, affecting public services.
Pressure on Government Finances
The difference between foreign currency inflows and outflows is termed the Current Account Deficit (CAD). High imports lead to more dollars leaving the country, increasing the CAD. The majority of foreign currency expenditure in India is on oil and gold imports.
What is RBI Doing to Curb the Decline?
Reports indicate that the Reserve Bank of India (RBI) has sold over $15 billion in March to stabilize the rupee. Typically, RBI’s intervention increases towards the end of the financial year (March), providing some relief.
Rupee Trends (March End Data)
March End Levels:
- 2017: 64.85
- 2018: 65.11
- 2019: 69.18
- 2020: 75.33
- 2021: 73.13
- 2022: 75.90
- 2023: 82.15
- 2024: 83.35
- 2025: 85.45
(Note: Indian rupee per dollar)
Trend: The rupee has been consistently weakening, particularly under pressure during the March quarter.
Impact on Asian Currencies (Decline Against USD)
Indian Rupee: -1.79%
South Korean Won: -3.69%
Philippine Peso: -4.05%
Thai Baht: -5.20%
This decline is not limited to India but is evident across Asia.
What Lies Ahead?
Analysts suggest that as long as oil prices remain high, pressure on the rupee will persist, and foreign investment outflows may continue. Currently, RBI’s intervention is the main support for the rupee. In the short term, the rupee may remain weak.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.
