Rupee Drops to 90.24 Against Dollar as Foreign Outflows and Venezuela Crisis Weigh
The rupee has slipped to a fresh low near the 90-per-dollar mark as record foreign investor outflows, risk-off sentiment after the US military operation in Venezuela, and cautious RBI intervention keep the currency under pressure. [web:17][web:18][web:24][web:32]
How the Rupee Slid to 90.24
A quick recap of the latest move in the rupee and why the 90-per-dollar mark is considered psychologically important for markets. [web:18][web:24][web:30]
The Indian rupee opened the week weaker and briefly fell to 90.24 per US dollar, extending the sharp depreciation seen in late December when it first slipped past the 90-mark and settled around 90.20. [web:18][web:24][web:30]
Traders attribute the slide to a stronger dollar, persistent demand for the greenback from importers and oil marketing companies, and heightened global risk aversion after US military intervention in Venezuela over the weekend. [web:18][web:21][web:32][web:35]
Despite some support from softer crude prices and a rally in domestic equities, sentiment around the rupee remains cautious because foreign portfolio investors continue to sell Indian stocks aggressively. [web:21][web:22][web:24][web:25]
Venezuela Crisis: Why It Hurts the Rupee
US military action in Venezuela has added a new layer of geopolitical risk, boosting demand for safe-haven assets like the US dollar. [web:18][web:23][web:32][web:35]
The US carried out a military operation in Venezuela, leading to the capture of President Nicolás Maduro and signalling Washington’s intent to influence control over the country’s large oil reserves. [web:18][web:23][web:32][web:35]
Such events typically push global investors towards safer assets, which means money flows into the US dollar, US government bonds and gold, while riskier emerging market currencies like the rupee face selling pressure. [web:23][web:26][web:32]
Even though Venezuela’s actual oil exports are limited due to sanctions, any conflict involving a major oil-rich nation increases uncertainty around future supply, adding to volatility in both oil markets and currency markets. [web:23][web:26][web:32]
Foreign Investors Continue Record Exodus
2025 saw record equity outflows from India, and the selling has continued into the first trading sessions of 2026. [web:22][web:25][web:28][web:31][web:34]
Foreign portfolio investors pulled out roughly ₹1.6 lakh crore from Indian equities in 2025, the highest annual outflow on record and worse than the previous peak in 2022. [web:22][web:25][web:28][web:31]
Rising US bond yields, a stronger dollar, global trade tensions – including the risk of higher US tariffs – and stretched domestic valuations all pushed global funds towards developed markets and away from emerging economies like India. [web:22][web:25][web:28][web:34]
The exodus has not stopped in 2026, with FPIs dumping over ₹7,600 crore of Indian shares in just the first two sessions of January, further weighing on the rupee by increasing dollar demand in the domestic market. [web:28][web:31][web:34]
RBI Intervention: Limited but Strategic Support
The central bank is defending the rupee around the 90 level but is allowing gradual adjustment instead of fixing a hard line in the sand. [web:21][web:24][web:36]
The Reserve Bank of India has been selling dollars through state-run banks to smooth volatility and prevent a disorderly slide, helping the rupee repeatedly find support close to the 90-per-dollar mark. [web:21][web:24]
India’s foreign exchange reserves are comfortably high, near the upper end of historical ranges, which gives the RBI enough firepower to intervene when required without exhausting its stockpile. [web:21]
However, the central bank prefers a calibrated approach, using intervention mainly to manage excessive intraday moves rather than defending a specific level, especially while markets await clarity on a potential US–India trade agreement. [web:21][web:24][web:25]
Key Exam-Focused Takeaways
Convert this news into crisp points that can be used in Mains answers, essays and objective-type GK questions. [web:18][web:22][web:24][web:28]
- Rupee has traded near 90.24 per US dollar, breaching the key 90 psychological level. [web:18][web:24][web:30]
- Major triggers: US operation in Venezuela, safe-haven demand for the dollar, record FPI outflows and importer dollar demand. [web:18][web:22][web:23][web:25][web:32][web:35]
- 2025 saw record equity outflows of about ₹1.6 lakh crore, with selling continuing into early 2026. [web:22][web:25][web:28][web:31][web:34]
- RBI is intervening via state-run banks but is allowing a gradual adjustment rather than hard pegging the rupee. [web:21][web:24]
- Low crude oil prices and resilient domestic equities are providing partial support to the rupee. [web:21][web:24]
Aspirant Corner: How to Use This Topic in Exams
- For UPSC / RBI Grade B, use this case to explain exchange rate dynamics, capital flows, and how geopolitics affects currency markets.
- For SSC / Banking, remember key numbers like rupee near 90.24/USD, FPI outflows around ₹1.6 lakh crore, and the role of RBI intervention. [web:18][web:22][web:24][web:28]
- For RRB NTPC and other railway exams, this topic fits in general awareness under Indian economy and current events in world economy.
- Use “Venezuela crisis + FPI exodus + RBI intervention” as a ready-made 3-point structure for short notes or descriptive answers. [web:18][web:22][web:23][web:24][web:32]
Practice PYQs on Currency & Capital Flows
Previous Year Type Questions (PYQs)
(1) Rise in crude oil prices
(2) Heavy foreign portfolio investment inflows
(3) Increase in US interest rates
(4) Geopolitical tensions that increase safe-haven demand
A. Large FPI outflows generally put downward pressure on the domestic currency.
B. FPI flows affect equity markets but do not influence the foreign exchange market.
C. Persistent FPI selling can force the central bank to intervene in the forex market.
Which of the statements is/are correct?
(a) A currency that is pegged to gold
(b) A currency that investors prefer during periods of global uncertainty
(c) A currency whose value never falls
(d) A currency used only for international trade
1. Higher reserves give the RBI more space to intervene in the forex market.
2. Reserves are maintained only in the form of gold.
3. Adequate reserves help manage sudden stop in capital flows.
Which of the statements given above is/are correct?
(1) Imported inflation pressures
(2) Cheaper exports in foreign currency terms
(3) Lower rupee cost of servicing external debt
Rupee at 90.24: Quick Snapshot
- Latest print: Rupee around 90.24 per US dollar in early trade. [web:18]
- Earlier session close: Around 90.20 after breaching 90 support. [web:24][web:30]
- Key driver: Geopolitical risk from US–Venezuela conflict and safe-haven dollar demand. [web:18][web:23][web:32][web:35]
- Domestic factor: Heavy FPI selling and importer dollar buying. [web:22][web:24][web:28][web:31]
Why FPIs Are Selling India
- Record equity outflows of about ₹1.6 lakh crore in 2025; worst on record. [web:22][web:25][web:28][web:31]
- Reasons: Higher US bond yields, stronger dollar, fears of US tariffs and stretched valuations in Indian markets. [web:22][web:25][web:28][web:34]
- FPIs have continued selling in early 2026, keeping pressure on both equities and the rupee. [web:28][web:31][web:34]
RBI’s Playbook
- Intervention mainly via state-run banks selling dollars around the 90 level. [web:21][web:24]
- Objective: Smooth volatility, not freeze the rupee at a fixed rate. [web:21][web:24]
- Comfortable forex reserves give flexibility, but RBI balances external stability with export competitiveness. [web:21]
How to Revise This Topic
- Write a 150–200 word note: “Factors behind rupee’s fall to 90.24 against the US dollar”.
- Practice a data-based question using numbers like 90.24, ₹1.6 lakh crore outflows, and FPI selling in Jan 2026. [web:18][web:22][web:28]
- Link rupee depreciation with inflation, trade deficit and RBI’s monetary policy for Mains answers.
Tip: In interview or GD, always connect currency moves to broader risk sentiment, capital flows and policy response.
