Rupee Rollercoaster: India's Currency Amid Global Turbulence

In 2024, the Indian rupee depreciated by 3% due to slowed economic growth and the robust U.S. dollar. Compared to other emerging market currencies, the rupee remained relatively stable, despite geopolitical and economic pressures. Outlook for 2025 suggests limited volatility with opportunities for recovery.

The Indian rupee experienced a 3% decline in 2024, pressured by slower economic growth and a strong U.S. dollar, yet it remained one of the least volatile global currencies. As the year ended, the rupee's value sunk with the dollar's dominance, affecting emerging-market currencies.

Commentators noted the rupee's fall was less severe against the dollar than other currencies. Former RBI governor Shaktikanta Das stated India's central bank intervened actively, reflecting a drop in foreign reserves from a peak of USD 704.89 billion to USD 644.39 billion by December 2024.

India faces further challenges with diminished Chinese demand and trade disruptions. In 2025, the rupee's stability is seen as contingent upon U.S. policies and potential domestic economic improvements, with a forecast exchange rate band of 82-87 per USD.

(With inputs from agencies.)