New Delhi [India], December 4 (ANI): The slide in Indian Rupee pushed by a posh mixture of exterior shocks, international investor outflows and restricted RBI intervention shouldn’t be mistaken for an inherently weak foreign money, mentioned SBI Research Ecowrap report on Thursday.
The Indian rupee on Wednesday slipped previous the psychologically important 90-per-dollar stage, marking one in all its quickest declines lately.
The rupee has fallen from Rs 85 to Rs 90 per USD in underneath a 12 months, far faster than earlier five-rupee intervals, which earlier took anyplace between 581 to 1,815 days. SBI in its report famous this because the second-quickest fall for the reason that 2013 Taper Tantrum.
Since April 2, 2025, when the United States introduced sweeping tariff hikes throughout economies, Indian rupee has deprecated by practically 5.5% towards USD, most amongst the main economies, however sporadic phases of appreciation owing to optimism over constructive, mutually helpful conclusion.
‘However, whereas Rupee is essentially the most depreciated foreign money amidst choose main economies, it’s not essentially the most risky,’ SBI report mentioned.
The excessive slab of fifty% tariff imposed on India, considerably increased than friends like China (30%), Vietnam (20%), Indonesia (19%), and Japan (15%), is without doubt one of the main elements behind present section.
Yet, the rupee stays among the many least risky currencies, with a coefficient of variation of just one.7% since April.
If we have a look at the Real Effective Exchange Rate (REER) knowledge of 40-currency basket with base 2015-16, the index was above 100 till May 2025. But the onset of the commerce battle has pulled it beneath the 100 stage, as rupee misplaced extra floor in contrast with different EM currencies, the SBI report highlighted.
The lowest stage in latest occasions was in April 2023, when the REER was recorded at 98.98.
Since April 2023, Rupee has declined practically 10% and the REER reached the bottom stage 97.40 in September 2025, which is 7-years low since November 2018, when it was at 99.60. Further, the most recent RBI REER knowledge as on October 2025 signifies Rupee is undervalued for third straight month, which displays softer foreign money and decrease inflation.
Generally, India’s REER stays within the vary of 102-105, with a mean of 103.47 throughout Dec’2018 to July’2025, the SBI report mentioned.
REER is the weighted common of a rustic’s foreign money in relation to an index or basket of different main currencies. (ANI)