India's falling rupee is not an illusion. Nor is it some harmless technical fluctuation to be explained away by the same regime that once treated every decline in the currency as proof of national ruin. There was a time when Narendra Modi and Nirmala Sitharaman sermonised endlessly about the rupee. Back then, when the dollar was in the low sixties and crude was nowhere near the levels India has had to confront in recent weeks, the BJP built an entire political theatre around the currency's weakness. The rupee, we were told, reflected the nation's dignity! A falling rupee was not merely an economic event. It was a moral indictment of the government in office. That sanctimony has now aged pretty badly.

Also Read: Middle East War: When brinkmanship becomes policy

In late March 2026, the rupee sank past 94 to the dollar and then past 95 in offshore trading before the Reserve Bank of India scrambled to curb speculative positions. Reuters reported that the rupee lost 4.24 per cent in March alone, its worst monthly fall in six years.

The RBI has since tightened derivatives rules and moved to shut down channels through which speculative and arbitrage pressure had intensified the slide. These are not the actions of an economy serenely in command of its external position. These are emergency measures taken when pressure is already visible, and confidence has begun to fray.

Of course, a falling currency does not by itself prove that an economy is collapsing. Exchange rates move for many reasons. Oil prices matter, the strength of the dollar matters, capital flows matter, and interest differentials matter. But then, that is precisely the point. India is not a detached observer of these pressures but is deeply exposed to them. She still depends on imports for roughly 85 to 90 per cent of its crude needs.........

© Mathrubhumi English