Rupee's real effective exchange rate falls to over 2-year low of 100.36 June
This story was originally published at 17:37 IST on 23 July 2025
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--RBI: Rupee effective FX rate index 100.36 in Jun vs 101.12 in May
--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 an over two-year low of 100.36 in June from 101.12 in May, according to data released by the Reserve Bank of India Wednesday.
The Indian currency's real effective exchange rate fell last month due to gains in other currencies against the greenback, as the dollar index fell 2.7% but the rupee also depreciated 0.2% against the dollar. The rupee had fallen sharply in the beginning of the month due to a rise in tensions in West Asia and the rise in crude oil prices, but recovered most losses due to net foreign fund inflows of nearly $2.4 billion into domestic financial markets in June as the tensions eased. Initial public offerings also contributed to the domestic unit's recovery near the end of the month.
"In June, India's inflation (on a month-on-month basis) was 0.9 percentage points higher than the weighted average inflation of its major trading partners. Despite this, the INR (Indian rupee) depreciated (month-on-month) in real effective terms by 0.7% as depreciation of the INR in nominal effective terms more than offset positive relative price differentials," according to a paper by the 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 86.41
Reported by Aaryan Khanna and Pratiksha
Edited by Avishek Dutta
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