Has the Rupee Really Fallen This Time?:-
Has the Indian rupee really fallen? Is this also damaging India’s credibility? In the past years, people used to say that brother, the dollar has increased, hence the rupee is weakening. But is it correct to believe now that it is not just the dollar that has increased? This time the story is the opposite. This time the story is that the rupee has fallen. Because what happened this time did not happen before. This time the story is not just about the dollar.
A Rare and Uncomfortable Moment:-
The story is about the Euro, the Pound , the Yen, the Yuan and the truth that Nir and Reer had told about the Rupee but no one paid attention to it. Last week, the rupee closed at 89.46 against $1. 89.46, then the headline became that the rupee changed into falling towards the greenback. However nobody asked whether this autumn changed into best towards the dollar or whether or not the indian rupee additionally fell drastically towards the euro, pound and even the japanese yen. It has fallen a lot that it sincerely looks as if it has fallen. The question is why did we fall so much against the greenback in three hundred and sixty five days ? The situation changed into even worse compared to eighty four.Forty nine euros a year in the past and 89.46 euros this time. The dollar is greater sharp, falling towards the pound from 89.12 to 103.63. Meaning the story is that the idea of strengthening greenback isn’t always there this time.
Why This Fall Matters More Than Before:-
This time the story is about the weakening of the rupee. Although there is talk of money. This is an important issue, so there will be many of you who might want to skip the video. It happens. Then these same people say why don’t inflation and unemployment destroy us? Because you don’t listen. I hope that some of you will listen, understand and share. Only then will it be fun to communicate because we have a two-way relationship. And today when we are talking about the fall of rupee, it is important to ask this question whether this fall is just nominal or is it a game of numbers or is it real? If it is real then how did the change come about? Will RBI jump into the market to save the rupee like before? Earlier declines were often attributed to the strength of the dollar. But this time the story is different. Will this cheap rupee make us stronger in the international market or will it weaken our economy, very very very weak. Today we will understand all these things in this video. To understand these, we will also understand those two words whose meaning is as easy as the name sounds. The names are Neer and Ree.
What NEER Really Measures:-
NEER means Nominal Effective Exchange Rate. An index that measures how the rupee is performing against a basket of 40 of the world’s most important currencies. Just as CPI tells how much inflation has increased, similarly NEER tells how strong or weak the rupee is today compared to the base year of 2015-16. Now if the rupee is 90, then it means that the rupee has weakened by 10 compared to that base year i.e. when it was 100. It measures the strength of the rupee not just against the dollar but also against India’s entire global trade basket. This is why it is important to understand when water indicates a major decline. He has given the same indication in 2025. Clear sharp different than before. The decline in water level between January 2022 and January 2025 was 3.4. That is, there was a kind of stability from 93.94 to 90.75. But in 2025, the same index has fallen sharply in 9 months and now stands at 84.58. This decline shows that our rupee is weakening not against the dollar but against 40 major currencies of the world on the global platform. And this is real weakness and not a momentary market fluctuation. But the real picture shows what it is.
The Real Test: What REER Reveals:-
Real Effective Exchange Rate. You can call this the truth of the rupee because it is not just the exchange rate but also the difference in inflation between countries. If inflation in India is higher than in other countries, then even if the rupee appears slightly stronger, the real value of the rupee will actually fall due to Indian goods becoming expensive. Even if inflation in India is much lower and the rupee falls a little, the real situation of the rupee is different. This is why the real game that tells us is how cheap or expensive Indian products will be in the world. RIR had shown a historic turn in the last 2 years. In November 2024, the RER was 108.06. This means that the rupee was the most overvalued in history compared to the world. Indian products were seen as expensive and this was suppressing India’s exports. But in 11 months it has fallen by only 9.8% and reached 97.47, below 100. That means now the value of rupee has reached the undervalued zone for the first time in history.
Why the Rupee Became Undervalued:-
This change did not come suddenly. There were two reasons behind this. The first reason is that the rupee has weakened against almost every major currency. In which we told you earlier that Dollar, Euro, Pound, Zhen and even Chinese Yuan also became expensive compared to Rupee. This indicates that the problem is not just about the dollar being strong but is a combined process of India’s domestic and global economic environment. The second reason is more important. India’s inflation has reached its lowest level in history.
Is a Weak Rupee Good or Bad?:-
In October 2025, CPI inflation was only 0.25, whereas it was 3 in both America and Japan, 3.6 in UK, 2.1 in Europe, 4.7 in Brazil, 2.9 in Indonesia, that is, when the rest of the world was becoming expensive and India was stable and at the same time the rupee was falling, then the rupee comes down rapidly, due to which the real value of the rupee decreases. This is why today Re is below 100 and showing the rupee as undervalued. Now the question arises whether it is good or bad for India? So see, it is a good situation for exporters because Indian goods are looking cheaper than before in the world. But is this a sign of increasing competition or is it a sign of weakening domestic demand ? Is this a strategy or an uncontrolled situation? And this is where the role of RBI also comes into play. What will RBI do? Earlier, RBI used to hold the rupee in a specific range of 82 to 83. Used to interfere. He used to buy and sell dollars. But now the picture has changed. On 26 November 2025, the IMF placed India in the Crawl Like Arrangement. Keep crawling. This means that RBI is neither leaving the rupee free nor holding it tightly. Letting it creep. Let it fall slowly like this. But the policy of caution can be understood. The new Governor also clarified that RBI will no longer interfere much.
Why the RBI Is No Longer Defending the Rupee:-
There are two reasons for this. First, if inflation is under control then there is no compulsion to keep the rupee strong. Secondly, due to Donald Trump’s tariff policies and increasing dumping by China in the world, India has to use the cheap rupee as a strategic weapon to maintain its competitiveness. Now the question is whether the rupee will fall further in the coming months ? So the answer is almost certainly yes. Because when inflation is low and RBI’s intervention is limited, the rupee gradually gets undervalued. Rei may also fall forward. But it has both advantages and disadvantages. The advantage is that India’s export potential can increase. India will appear cheap in the world. Global competition will strengthen. The disadvantage is that foreign investors may be scared by the instability of the rupee. The rupee’s continued decline could increase the cost of imports, and if the decline becomes more severe, it could also create economic pressure. The final question is, is this decline a crisis or an opportunity? Is this a turning point in the rupee’s history or a temporary hiccup? Will this make India stronger or weaker from within? Look for 89.46 or 89.9 because it changes every day. There is not a number. There is a new policy chapter. This is the moment when India decided that instead of killing exports by keeping the rupee expensive, we will become competitive in the world by keeping the rupee cheap.
Will the Rupee Fall Even Further?:-
But every coin has two sides. A cheap rupee can make us stronger. But a very cheap rupee can also weaken our economy. This is just the beginning. Then who knows how far 90 95 100 will go. The next few months will tell whether this cheap rupee will become our friend or foe. All we can say is that for now you should understand that this time the rupee did not fall on its own. This time the money was released.