Even though there has been a lot of improvement in the rupee against the dollar after the intervention of the Central Bank, it does not mean that there will be no impact on your pocket. If you are going to make any payment in dollars soon, i.e. tuition or exam fees for foreign studies, foreign travel, order of any gadget, visa related fees etc. then the effect of fall of rupee can be clearly visible on your pocket. According to media reports, after falling by 4.1 percent so far in the year 2025 (CY25), the rupee may stabilize at around 90 per dollar by the end of December. Most people estimate that the rupee may reach around 88.50 dollars against the dollar by the end of March. This means that the rupee may strengthen.
What has changed?
According to the report of Business Standard, so far in the financial year 2026, a decline of 4.3 percent has been seen in the rupee. Last week, the rupee had reached life time low at the level of 91.10. After hitting new low for four consecutive sessions, the rupee ended the week stronger by about 1.3 per cent against the dollar. According to the report, this has been attributed to the intervention of the Reserve Bank of India (RBI).
The value of the rupee fluctuated between 91.10 and 89.25 and then strengthened by 1.1 per cent to settle at 89.29 in the last hour of trading on Friday, compared to 90.26 in the previous session. Market experts told Business Standard that this step of RBI was taken with the aim of eliminating speculative situations and creating panic among traders who had taken long positions in dollars and short positions in rupees.
How to make your budget amid falling rupee?
If you are going to make payment in dollars soon, then do your planning considering Rs 90 per dollar as the base and keep some extra amount around it. Every Re 1 change in the US dollar-rupee (USD-INR) rate increases the value of your rupee by Rs 1,000 against $1,000. For example, if your payment is worth $3,000, a change of Re 1 will increase the value of the rupee by Rs 3,000. With this you can include the fluctuations of the rupee in your budget. This turns “rupee fluctuations” into a number that you can budget for.
Understand the complete calculation here?
At present there are three levels against the dollar. The first level is 88.50, which can be reached by the end of March 2026. The second level is of $90, which can last till the end of December 2025, while there is also a third level, that is of $91 which was seen in the month of December. If you want to make a payment of 500 dollars, then you will have to pay Rs 44,250 at the level of 80.50, Rs 45,000 at the level of 90 and Rs 45,500 at the level of 91. If your payment is of 2000 dollars, then you will have to pay between Rs 1.77 lakh to Rs 1.82 lakh. If the payment is not for 10 thousand dollars, then you may have to spend Rs 8.85 lakh to Rs 9.10 lakh from your pocket. In this way you can prepare a budget according to your capacity.
Different banks differ?
According to media reports, different banks of the country have their own opinion. According to Standard Chartered, the dollar level may remain at Rs 90 by the end of December, while by the end of March this level is likely to reach Rs 89.5. IDFC First Bank is looking at a level of 89.5090 by December end and 88.5 by March end. According to CR Forex, the dollar is likely to remain between 89.8090.20 by the end of December and 88.8089.20 by the end of March. RBL Bank is seeing the rupee hovering around 91 against the dollar by the end of December and 9293 by the end of March. At the same time, Bank of Baroda is seeing the rupee at 89.590 against the dollar at the end of December and at the level of 90 to 91 by the end of March. This distinction is important for budget making. If your payment due date is in January or February, your liability will be different from someone paying at the end of March – even if both are making payments within the same financial year.
Risk did not end even after RBI action
If you are not a trader, two things are important. Firstly, RBI is indicating that it does not want a unilateral decline. Market experts say the sale of dollars by the central bank indicates that it will not tolerate a “unilateral decline” situation, which will help curb speculation and reduce risk on both sides. give
After all, there are limits to intervention. RBI’s ability to intervene may be limited due to large short positions in the NDF and onshore forward markets, due to which it may have to liquidate some positions around 88.80 to maintain scope for future action.
According to forward market data, the RBI intervened by about $30 billion between June and October – $18 billion during June-September and $10 billion in October. The central bank’s short dollar forward position increased from $59 billion at the end of September to $63 billion by the end of October. In October, the RBI was continuously supplying dollars to prevent the rupee from weakening below 88.80.
While making the budget, keep a limit in mind. While the RBI may take a stance against excessive swings, your payment plan should consider volatility – especially if the payment date is fixed.