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)||60.02||62.29||66.25||64.86||65.11|
5 years of economic forecasts for more than 30 economic indicators.
India Exchange Rate Chart
Source: Thomson Reuters.
|Bond Yield||6.55||-0.04 %||Sep 04|
|Exchange Rate||71.99||-0.09 %||Sep 04|
|Stock Market||36,725||-0.08 %||Sep 04|
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October 11, 2019
Industrial production fell 1.1% in year-on-year terms in August, contrasting July’s revised 4.6% increase (previously reported: +4.3% year-on-year). Most industrial sectors contributed to the slump in August, with output in the manufacturing sector dropping the most, followed by output in the electricity sector.
October 4, 2019
The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) cut all monetary policy rates by 0.25 percentage points at its 1–4 October meeting, reducing the repo rate to 5.15%, the marginal standing facility to 5.40% and the reverse repurchase rate to 4.90%.
October 4, 2019
The composite Purchasing Managers’ Index (PMI) produced by IHS Markit sank to 49.8 in September from 52.6 in August, marking the first time in 19 months that it landed below the 50-threshold that separates contraction from expansion in the private sector.
September 13, 2019
Merchandise exports declined6.0% year-on-year in August, amounting to USD 26.1 billion, contrasting July’s 2.3% increase.
September 12, 2019
In August, consumer prices rose 0.49% compared to the previous month, down from July’s 0.91% increase.