Rupee Past ₹90: Governor Says Market Sets Price, Traders Track Volatility

The rupee’s slide beyond ₹90 per $1 has reignited volatility fears. RBI Governor Sanjay Malhotra says markets set levels, intervention only smoothens spikes.

After months of steady pressure, USD/INR moving beyond ₹90 has turned into a daily trading trigger. The rupee closed at ₹90.2950 on January 14, 2026, after touching ₹90.03 in early trade as intervention and foreign-bank dollar sales briefly supported it. Corporate hedging demand then pushed it back. 

In an NDTV Profit interaction, Governor Sanjay Malhotra played down any “red line” around ₹90-₹91, signalling a market-led rate with volatility control.

Why ₹90 Is Back In Focus Now?

₹90 is not just another number. It changes hedging behaviour, triggers stop-losses, and pulls more participants into the market. Reuters noted that corporate hedging demand has been picking up, keeping USD/INR sticky even when support emerges. 

On January 9, 2026, Reuters also flagged heavy equity outflows, with foreign investors selling nearly $1 billion of local stocks in January so far, on top of a near $19 billion outflow in 2025.

What The Governor Signalled And What Markets Heard?

In NDTV’s report on the interview, Malhotra’s key line was blunt: “Markets will determine prices.” NDTV Profit’s follow-up made the operational point clearer: there is no specific rupee level being targeted, including ₹90, and any action is aimed at checking excessive volatility, not fixing the exchange rate.

That stance has landed alongside real-time stress signals. Reuters reported far-forward premiums rising, with the 1-year implied yield touching 2.78% on January 14, 2026, the highest since late December. Separately, Reuters said the central bank’s $10 billion 3-year FX swap auction drew bids of nearly $29.94 billion, almost 3x the offer, with a cut-off premium of ₹7.28 and 42 bids accepted.

Before the day’s narrative moves on, these are the tightest market tells around the ₹90 zone.
 

 
Those numbers suggest the fight is not only spot on. It is also in hedges, premiums, and positioning.

How The Rupee Got Here: The Build-Up Since Early December

The slide accelerated in early December. LoansJagat reported the rupee hit a record ₹90.42 per dollar on December 4, 2025, in Mumbai trade, with early importer demand lifting dollar buying. Reuters, on December 3, 2025, described the move past ₹90 as the extension of an 8-month decline, driven by weak trade and investment flows and a rush to hedge.

Into January, the tape stayed jumpy. Reuters said the rupee opened at ₹89.95 on January 8, 2026, rebounded to ₹89.75 after intervention, but still ended weaker at ₹90.0175. 

LiveMint carried the same price action and quoted a trader saying moves were being dominated by one large player again. By January 12, 2026, Reuters reported USD/INR near ₹90.20 and also flagged a record-low ₹12.95 against the yuan, with MUFG projecting ₹92.00 by Q3 2026.

Stakeholders Put Their View Across 

Malhotra has insisted there is no red line at ₹90 or ₹91, and that prices are market-led with volatility control. Traders quoted by Reuters said the rupee has started changing direction based on intervention presence, while bankers advised importers to keep hedge ratios high amid fragile inflows.

Conclusion

₹90 has become a trading magnet, not a policy marker. Near-term direction now hinges on hedging pressure, foreign flows, and how quickly volatility cools.