Rupee's real effective exchange rate 102.37 in Feb, lowest since May 2023
This story was originally published at 18:49 IST on 19 March 2025
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--Rupee real effective exchange rate 102.37 Feb, lowest since May 2023
--RBI: Rupee effective FX rate index 102.37 in Feb vs 104.84 in Jan
MUMBAI – The rupee's real effective exchange rate against a basket of 40 currencies, in terms of trade-based weights, fell to 102.37 in February, its lowest level since May 2023, according to the data released by the Reserve Bank of India on Wednesday. The rate was at 104.82 in January.
"The INR depreciated by 2.4% (m-o-m) in terms of the 40-currency real effective exchange rate (REER) in February 2025 due to depreciation of the INR in nominal effective terms and narrowing of India's inflation differential with its major trading partners," RBI staff said in their monthly State of the Economy article, also released on Wednesday.
The spot rupee depreciated by over 1% against the dollar in February, falling below the psychologically crucial 87-per-dollar towards the end of the month on dollar demand from importers and as banks persistently bought the greenback for outflows from domestic equities. FPIs withdrew almost $4 billion on a net basis from India in February.
The rupee fell to a record low of 87.95 a dollar in early February and could have breached 88 a dollar mark if not for the RBI's dollar sales, which were not as aggressive as they were in 2024.
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 86.44
Reported by Kabir Sharma
Edited by Ashish Shirke
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