Exchange Rate in India
India - Exchange Rate (average of period)
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 (aop) Data
|Exchange Rate (vs USD, aop)||60.42||61.14||65.42||67.04||64.46|
5 years of economic forecasts for more than 30 economic indicators.
India Exchange Rate (aop) Chart
Source: Thomson Reuters.
|Bond Yield||6.37||-0.04 %||Jul 31|
|Exchange Rate||68.88||-0.09 %||Jul 31|
|Stock Market||37,481||-0.08 %||Jul 31|
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August 14, 2019
Merchandise exports increased 2.3% year-on-year in July to reach USD 26.3 billion, contrasting the 9.7% decrease in June.
August 14, 2019
In July, consumer prices rose 0.91% compared to the previous month, up from June’s 0.63% increase, partly due to higher prices for food and beverages, which more than outweighed a decrease in energy prices. Consumer price inflation decelerated to 3.1% in July from 3.2% in June.
August 9, 2019
Industrial production increased 2.0% in annual terms in June, down from May’s revised 4.6% increase (previously reported: +3.1% year-on-year) and marking the lowest reading since February. In terms of sectors, growth in June was weighed on by weaker readings in the manufacturing and mining sectors.
August 7, 2019
The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) cut all monetary policy rates by 0.35 percentage points at its 5–7 August meeting, reducing the repo rate to 5.40%, the marginal standing facility to 5.65% and the reverse repurchase rate to 5.15%.
August 5, 2019
The composite Purchasing Managers’ Index (PMI) produced by Nikkei and IHS Market rose to 53.9 in July from 50.8 in June, representing the highest reading since November 2018.