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The Indian rupee continues to face intense pressure in global currency markets. On December 2, 2025, the rupee slipped to 89.92 per US dollar, nearing the psychological level of 90. Currency fluctuations are common, but the sharp decline in the rupee this time has raised serious concerns for investors, consumers, import-dependent businesses, and overseas travelers.

A weaker rupee affects purchasing power, increases the cost of imported goods, reduces real returns on investment, and disrupts sectors heavily reliant on foreign currency. Experts caution that if the downward trend continues, the impact may become more visible across multiple sections of the economy.

A strong dollar and rising global economic uncertainty have placed significant pressure on emerging market currencies, including India. When the rupee weakens:

• Import costs rise, making everyday products more expensive.

• Foreign education and travel become costlier because expenses must be paid in dollars.

• Corporate profit margins shrink, especially for businesses dependent on imported raw materials.

• Investor sentiment weakens, impacting stock market stability.

• Bond yields may rise, but real returns can still fall because inflation and currency risk eat into gains.

Financial mentor Kirang Gandhi from Pune explains that a continuing decline in the rupee could worsen the trade deficit, leading investors to prefer safer asset classes.

A falling rupee often triggers higher volatility in the stock market. Foreign Institutional Investors (FIIs) may increase their selling activity, pulling money out of Indian equities and putting pressure on market performance. While bond yields can climb, the real return after adjusting for currency depreciation may reduce investment benefit.

However, experts also believe that this environment can create opportunities to diversify and hedge risk through global exposure and real assets.

Financial experts recommend several smart strategies to protect wealth during a period of currency weakness:

According to Lt. Colonel (Retd.) R.S. Banerjee, founder of True North Finance, investors can use global diversification to balance the negative impact of a weak rupee. He notes that when the rupee depreciates against the dollar, returns from US equities naturally increase by about 2–3% annually, even without accounting for market growth.

Gandhi also suggests allocating 10–20% of the portfolio to global equities for efficient risk hedging.

Companies in IT and pharmaceuticals earn a significant share of their revenue in US dollars. When the rupee falls, their earnings in India rise, supporting stock performance. Therefore, experts recommend increasing exposure to Nifty IT, large-cap pharma companies, or related sector funds.

Real assets and gold also tend to perform better during weak currency and inflationary periods, offering a defensive hedge.

Gold has historically proven to be a safe haven during currency instability and geopolitical tension. Gandhi advises investing 5–10% of the portfolio in Gold ETFs or Sovereign Gold Bonds (SGBs), depending on liquidity needs. These instruments provide security against inflation and market volatility.

Investors should regularly rebalance their portfolios to manage risk. A suggested allocation model is:

• 70–80% in domestic assets

• 20–30% in international assets

Regular review ensures that changing market conditions do not disproportionately affect returns.

While the falling rupee is a challenge, it is also an opportunity to rethink investment strategy with a long-term perspective. A combination of global diversification, sector-specific investments, and gold hedging can help protect portfolios from currency-related losses.

Investors are advised to stay disciplined, avoid panic selling, and seek expert guidance before making major decisions.