Rupee's real effective exchange rate falls to near-2-yr low of 100.80 in Apr
This story was originally published at 22:44 IST on 21 May 2025
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--RBI: Rupee effective FX rate index 100.80 in Apr vs 101.50 in Mar
--CONTEXT: Real FX rate index for trade-weighted, 40-currency basket
NEW DELHI – The rupee's real effective exchange rate against a basket of 40 currencies, in terms of trade-based weights, fell to a 23-month low of 100.80 in April from 101.50 the previous month, according to data released by the Reserve Bank of India late Wednesday.
The rupee appreciated over 1% against the dollar in April, owing to weakness in the dollar index and a sharp fall in crude oil prices. However, the Indian currency's real effective exchange rate fell last month as other currencies appreciated more sharply against the greenback.
The dollar index, which measures the strength of the dollar against a basket of six major currencies, declined over 4% in April due to soft US economic data and President Donald Trump declaring a 90-day pause on his reciprocal tariffs.
"The INR (Indian rupee) depreciated (month-on-month) by 0.7% in real effective terms in April as India's inflation (month-on-month) was 1.4 percentage points lower than the weighted average inflation of its major trading partners, more than offsetting the appreciation in the nominal effective exchange rate," 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
US$1 = INR 85.64
Reported by Pratiksha
Edited by Deepshikha Bhardwaj
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