Rupee's real effective exchange rate falls to near 12-yr low of 95.30 in Dec
This story was originally published at 17:54 IST on 21 January 2026
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--RBI: Rupee effective FX rate index 95.30 in Dec vs 97.52 in Nov
--CONTEXT: Real FX rate index for trade-weighted, 40-currency basket
NEW DELHI – The rupee's real effective exchange rate index, based on a basket of 40 currencies in terms of trade-based weights, fell to a near 12-year low of 95.30 in December from 97.52 in November, according to data released by the Reserve Bank of India Wednesday. The print indicates the Indian currency is undervalued by nearly 5%.
The rupee fell 0.5% against the dollar in December owing to a strong foreign portfolio outflows and a prolonger delay in a trade deal between India and the US. The dollar index, which measures the strength in the dollar against six major currencies, fell 1.2% last month.
"In real effective terms, the Indian rupee depreciated in December due to depreciation of INR (Indian rupee) in nominal effective terms and relatively lower inflation in India vis-a-vis its major trading partners," the RBI staff said in the state of the economy article.
The 40-currency basket includes 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 91.70
Reported by Pratiksha
Edited by Akul Nishant Akhoury
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