USD vs INR: Rupee hits historic low against dollar. Rising costs, expensive loans and falling stocks explained

By Admin

26 Sep, 2025

The Indian rupee has once again found itself under immense pressure, hitting a historic low of ₹88.76 against the US dollar on September 25, 2025. This sharp depreciation has far-reaching implications, not only for India’s economy but also for the personal finances of millions of citizens. Driven by rising US tariffs on Indian goods, consistent foreign outflows, and a steep hike in H-1B visa fees, the weakening rupee is creating ripple effects across multiple sectors, including trade, investments, education, and travel.

Adding to the concerns, Tata Consultancy Services (TCS), India’s largest IT company by market capitalization, recently hit a 52-week low of ₹2951 per share, reflecting negative investor sentiment on Dalal Street. As the dollar strengthens, let us explore five major ways this depreciation of the rupee impacts the financial health of individuals and businesses.

I. Inflation Surge

A weaker rupee automatically makes imports costlier, especially crude oil and essential consumer goods. Rising fuel prices feed into higher transportation and production costs, eventually pushing up the price of everyday essentials. This inflationary spiral erodes household purchasing power, making daily living expenses more difficult to manage for common citizens.

II. Costlier Foreign Education and Loans

One of the immediate effects of a falling rupee is on overseas education costs. Tuition fees, accommodation, and living expenses, already expensive in foreign currency terms, now require more rupees to cover. Similarly, borrowers with loans in US dollars or other foreign currencies will face higher repayment burdens, making debt management a serious challenge.

III. Negative Impact on Investments

The weakening currency is also weighing heavily on the equity market. Foreign institutional investors (FIIs) have already offloaded over ₹1 lakh crore worth of equities between July and early September 2025, citing weak earnings, stretched valuations, and uncertainty over Trump’s tariff policies. A declining rupee only worsens the scenario, as investors worry about currency-related losses.
On the flip side, dollar-denominated foreign investments stand to gain in value when converted back into rupees, offering some cushion for global investors.

IV. More Expensive Overseas Travel and Purchases

For Indians planning foreign trips or buying imported goods like smartphones, laptops, and electronics, the impact is immediate. Airfares, hotel stays, and shopping bills abroad will now require significantly more rupees, shrinking affordability for many families and professionals. Even domestic consumers relying on imported gadgets and luxury items will feel the pinch.

V. Higher Debt Repayment Burden

Businesses and government agencies with overseas borrowings will now face heavier repayment obligations. Every dollar of debt now costs more in rupee terms, straining corporate balance sheets and increasing fiscal stress. This could also lead to slower investment activity and tighter liquidity in the economy.

Conclusion

The depreciation of the rupee against the dollar is not just a headline it is a financial reality that affects everyone. From rising fuel bills to costlier education and travel, volatile markets, and growing debt pressures, the weak rupee is reshaping personal and national finances. Policymakers, businesses, and individuals must adapt quickly, plan strategically, and safeguard their finances amid these turbulent times.

Disclaimer: Currency movements and financial impacts carry risks. This article is for informational purposes only and not investment advice. Please consult certified experts before making financial decisions.