REER Index
Rupee's real effective exchange rate falls for third straight month in Feb
This story was originally published at 19:29 IST on 23 March 2026
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--RBI: Rupee effective FX rate index 94.05 in Feb vs 94.82 in Jan
--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 third consecutive month in February, according to data released by the Reserve Bank of India Monday. The rupee's real effective exchange rate index was at a near 12-year low of 94.05 in February, down from 94.82 in January.
The print indicates the Indian currency is undervalued by nearly 6%. The last time the rupee's real effective exchange rate was below 94.05 was in April 2014, at 93.37.
The rupee rose more than 1% against the dollar in February after the US and India announced they were finalising an interim trade deal. The dollar index, which measures the strength of the dollar against six major currencies, rose 0.5% in February.
"In real effective terms, the Indian rupee depreciated in February due to depreciation of INR in nominal effective terms and relatively lower inflation in India vis--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 93.98
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Shubham Rana
Edited by Saji George Titus
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