Real Exchange Rate
Rupee's real effective exchange rate at near 13-year low of 89.21 in May
This story was originally published at 18:38 IST on 22 June 2026
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--RBI: Rupee effective FX rate index 89.21 in May vs 90.97 in Apr
--CONTEXT: Real FX rate index for trade-weighted, 40-currency basket
NEW DELHI – The rupee's real effective exchange rate, based on a basket of 40 currencies in terms of trade-based weights, fell for the sixth consecutive month in May to a near-13-year low, according to data released by the Reserve Bank of India Monday. The rupee's real effective exchange rate index fell to 89.21 in May from 90.97 in April. The latest print indicates that the Indian currency is undervalued by almost 11%.
The rupee fell 0.1% against the dollar in May despite Brent crude oil price slumping over 17% on hopes of a peace deal between the US and Iran.
"In real effective terms, the Indian rupee depreciated in May, driven by pronounced depreciation of INR in nominal effective terms, which outweighed the offsetting effect of India's relatively higher inflation vis--vis its major trading partners," the RBI staff said in the State of the Economy article in the central bank's 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
US$1 = INR 94.68
Reported by Pratiksha
Edited by Saji George Titus
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