Rupee's real effective exchange rate falls to 107.20 in Dec from record high
This story was originally published at 20:24 IST on 17 January 2025
Register to read our real-time news.Informist, Friday, Jan. 17, 2025
--RBI: Rupee effective FX rate index 107.20 in Dec vs 108.13 in Nov
--CONTEXT: Real FX rate index for trade-weighted, 40-currency basket
MUMBAI – The rupee's real effective exchange rate against a basket of 40 currencies, in terms of trade-based weights, fell to 107.20 in December from the record high of 108.14 in November, according to the data released by the Reserve Bank of India on Friday. Incidentally, last month's REER matched the one in October.
The rupee depreciated about 1.3% against the dollar in December, because of the strength in the dollar index, and the weakening Chinese yuan. The dollar index, which measures the strength in the greenback against a basket of six major currencies, strengthened 2.6% last month. Further, unlike November, overseas investment witnessed net inflows in December. It provided some support to the rupee.
The fall in the rupee's real effective exchange rate in December also coincided with the change in the governor of the RBI. Replacing Shaktikanta Das, Sanjay Malhotra took charge as the 26th governor of the RBI on Dec. 11.
In 2024, the rupee depreciated nearly 3%, with the fall in the rupee in December contributing to around 43% of the total depreciation. Market participants said the rupee has depreciated sharply in the last one month, primarily to allow the rupee to be competitive amongst its Asian peers.
"...The INR remained one of the least volatile major currencies during the month (December). The INR depreciated by 0.9% (month-on-month) in terms of the 40-currency real effective exchange rate in December, majorly on account of negative relative price differentials," according to a paper by central bank staff on the State of the Economy in the RBI monthly bulletin.
The 40-currency basket includes the currencies of Angola, Australia, Bangladesh, Brazil, Canada, Chile, China, Egypt, the European Union, Ghana, Hong Kong, Indonesia, Iran, Iraq, Israel, Japan, Kenya, Kuwait, Malaysia, Mexico, Nepal, Nigeria, Oman, Qatar, Russia, South Korea, Saudi Arabia, Singapore, South Africa, Sri Lanka, Switzerland, Taiwan, Tanzania, Thailand, Turkey, Ukraine, the United Arab Emirates, the UK, the US, and Vietnam. End
Reported by Sourabh Kumar
Edited by Deepshikha Bhardwaj
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
