Exchange Rate in India
India - Exchange Rate
The rupee crashes to record low due to large economic imbalances and suppressed investor appetite for emerging-market assets
The rupee weakened to a historic high against the USD in September, compounding the poor performance of recent months. This was largely due to India’s economic imbalances, as demonstrated by the merchandise trade deficit which has reached multi-year highs in recent months, and falling investor confidence in developing economies. On 11 September, the rupee traded at 72.6 per U.S. dollar, worsening 5.4% from the same day a month earlier and the weakest it has been against the USD in history. So far this calendar year, the rupee has shed 13.6% of its value against the dollar.
The rupee’s recent woes have come amid resurging oil prices—as of 11 September, Brent crude oil prices rose more than 40% compared to the same day a year earlier. This has put enormous pressure on India’s merchandise trade balance given that India imports most of its oil and has underpinned inflationary pressures. Moreover, FocusEconomics Consensus Forecast panelists expect the current account deficit to deteriorate this year. In addition to higher oil prices, investors have been fleeing emerging-market assets in recent months, most evidently in Turkey and Argentina. This follows the tightening of monetary policy in major developed economies and the erection of trade barriers around the world, dampening global growth potential. With a similar scenario affecting capital markets in India, this has resulted in outflows from the stock and bond markets, worsening the current account deficit.
Looking ahead, FocusEconomics panelists see the rupee strengthening from recent lows, ending FY2018 (which ends in March 2019) at 68.2 INR per USD and ending FY 2019 at INR 67.9 per USD.
India - Exchange Rate Data
|Exchange Rate (vs USD)||66.25||64.86||65.11||69.19||75.34|
5 years of economic forecasts for more than 30 economic indicators.
India Exchange Rate Chart
Source: Thomson Reuters.
|Bond Yield||6.50||-0.04 %||Jan 01|
|Exchange Rate||71.23||-0.09 %||Jan 01|
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July 3, 2020
The composite Purchasing Managers’ Index (PMI) produced by IHS Markit climbed to 37.8 in June from 14.8 in May.
June 15, 2020
Merchandise exports fell 36.5% in year-on-year terms in May, after falling an historic 60.3% in April (the sharpest fall since at least the early 1990s), amounting to USD 19.1 billion.
June 15, 2020
The National Statistical Office of India released only partial consumer price index (CPI) data for May, as it did previously for April, because of logistical issues related to the coronavirus pandemic.
June 12, 2020
Industrial output fell 55.5% in year-on-year terms in April, which was a larger contraction than March's 18.3% decrease.
June 3, 2020
The composite Purchasing Managers’ Index (PMI) produced by IHS Markit inched up to 14.8 in May from 7.2 in April; the reading in April thus continues to mark the lowest point since current records began in December 2005.