The Indian rupee is feeling the heat today, Friday, January 16, 2026, as it just pulled its steepest one-day nose-dive in nearly two months.1
The thing is, the currency crashed 50 paise to close at 90.8650 per dollar.2 Or nothing. Let’s be real, we are now inches away from the all-time “horror” low of 91.14 we saw back in December. Those too. Importers are scrambling for dollars, and the “safety net” from state-run banks—likely acting on orders from the RBI—is the only reason we didn’t blow past the record today.
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The “Rupee Rout” Log: Field Notes
It’s an ongoing situation where global trade jitters and a “hawkish” US Fed are squeezing the life out of emerging market currencies.
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The Importer Scramble: Importers are panicking and locking in hedges because they expect the dollar to get even more expensive. The thing is, when everyone wants dollars at the same time, the rupee just melts.
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The Trade Gap: Fresh data from yesterday shows the trade deficit widened to 25.04 billion in December.3 The thing is, we’re importing way more than we’re exporting. And here’s the kicker—even though exports to the US are holding steady at 6.9 billion, they’re facing massive 50% tariffs.4 Those too.
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The “Malhotra” Strategy: Under RBI Governor Sanjay Malhotra, the central bank seems more willing to let the rupee find its own level rather than burning all our reserves to defend a specific number.5 The thing is, they still jumped in today with “intermittent” dollar sales just to keep the fall from turning into a total collapse.
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The Fed Factor: US economic data is too good. The thing is, traders are now betting 67% that the Federal Reserve will not cut interest rates in April. High US rates mean investors keep their money in dollars, leaving the rupee out in the cold.
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Rupee vs. Dollar: The Jan 16 Snapshot
| Metric | Current Value | Day’s Change | The “Why” |
| USD/INR Spot | 90.8650 | -0.6% (Slump) | Importer demand + FII outflows. |
| Intraday Low | 90.8900 | — | Barely held above all-time low. |
| Trade Deficit | $25.04 Billion | Widened | High electronics & oil imports. |
| US Tariffs | 50% | Active | Affecting Indian goods like steel/textiles. |
| RBI Reserves6 | $687.19 Billion7 | +$392 Million8 | Minor buffer increase (as of Jan 9).9 |
And Here’s the Kicker…
ANZ analysts are basically saying this pressure isn’t going anywhere until an India-US trade deal actually gets signed. The thing is, the Commerce Secretary said yesterday that the deal is “very near” but refused to give a date.10 Those too.
It’s an ongoing situation where the RBI is in a tough spot. The thing is, if they keep selling dollars to save the rupee, they suck liquidity out of Indian banks, which makes it more expensive for you and me to get a home loan. It’s a messy balancing act.
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End…
