USD vs INR: The Indian rupee hit a historic low on Thursday, hovering around ₹88.76 against the US dollar. The fall is driven by rising US tariffs on Indian goods, consistent foreign outflows, and a steep hike in H-1B visa fees. These factors are expected to impact remittances and the IT sector in the coming months.
Reflecting the sentiment on Dalal Street, India’s largest IT company by market capitalisation, Tata Consultancy Services (TCS), has touched a new 52-week low of ₹2951 per equity share on September 25, 2025.
Furthermore, this sharp rupee depreciation brings multiple challenges for Indians that can hurt personal finances in various ways. Let us discuss the five most important implications of a weak rupee briefly:
I. Inflation surge
To put it simply, a weaker rupee makes imports costlier, notably crude oil and consumer goods. This results in higher fuel prices and boosts overall inflation. This inflationary pressure negatively impacts household purchasing power, thus making everyday expenses of common citizens more burdensome and difficult to deal with.
II. Costlier foreign education and loans
Families and students paying for overseas education facilities face increased rupee costs. Foreign tuition, living expenses, and day-to-day facilities become more expensive due to the depreciation of the Indian currency. On similar lines, loans availed in foreign currencies, especially dollars, will become more expensive and difficult to repay, increasing the overall debt burden on the borrower.
III. Negative impact on investments
Foreign investors have been aggressively selling Indian equities since the start of this year, and the selling has gained momentum over the last few months. From the beginning of July 2025 to the first week of September, the FIIs, i.e., foreign institutional investors, have offloaded Indian equities worth over ₹1 lakh crore on stretched valuations, weak earnings, and uncertainty over Trump tariffs and a deal between India and the US.
A weakening rupee might further contribute to this decline as foreign investors might fear currency loss. Conversely, dollar-denominated foreign investments could gain value when converted back to rupees.
IV. More expensive overseas travel and purchases
Travelling overseas and purchasing imported products, phones, computers, and other equipment can become more expensive. An Indian citizen purchasing these services might be required to shell out more rupees to cover expenses priced in dollars. This can immensely limit the affordability and make things complicated for them.
V. Higher debt repayment burden
The weakening rupee will result in steeper repayment costs, increasing fiscal pressures, and business risks for government and corporate borrowers with overseas debt.
Therefore, as the rupee continues to slide and weaken against the dollar, the combined impact of inflation, costly education and foreign travel, equity market volatility, and debt repayment burdens will strain the personal finances of both citizens and the nation as a whole.
Policymakers, investment professionals, and individuals need to understand and acknowledge these financial challenges closely amid persistent global trade tensions and currency pressures. They also need to sit down and properly plan their finances to ensure that they can amicably deal with these challenges effectively.
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.
