New Delhi, July 6 -- Since 1991, when a balance of payments crisis triggered a dramatic two-step rupee devaluation (9% on 1 July and another 11% two days later), India's foreign exchange management has come a long way. The rupee now operates under a managed float regime: largely market-determined, but with Reserve Bank of India (RBI) interventions to curb volatility.

Yet policy flip-flops and global disruptions triggered by President Donald Trump's second term could shake the rupee-dollar market almost as profoundly as that 1991 reset, 35 years ago.

On an average, the rupee has depreciated by about 3-4% against the dollar each year, with occasional depreciation spikes during periods of crisis. Before Trump came back to power, in 2024, t...