To understand movements on these variables, one must understand India’s Balance of Payment (BoP) statement. “It is important to remember that it is more of a story of the dollar strengthening than the rupee weakening,” said Pronab Sen, former Chief Statistician of India. In other words, while the US dollar has become stronger against all other major currencies including the rupee, the rupee, in turn, has become stronger than many other currencies such as the euro. If one looks at a whole basket of currencies, then data suggests the rupee has become stronger (or appreciated against that basket). Moreover, the US dollar is just one of the currencies Indians need to trade. Rupee’s exchange rate against the dollarĪnother thing to note is that, at least as of now, the rupee is still more resilient (that is, it has remained relatively strong against the dollar) than it was in some of the previous crises such as the Global Financial Crisis of 2008 and the Taper Tantrum of 2013. The current fall has brought about a correction. In the last couple of years, the rupee has been more resilient than the long-term trend. If the rupee depreciates at a rate faster than the long-term average, it goes above the dotted line, and vice versa. The dotted line shows the long-term trend of depreciation. Therefore, Fusion Media doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.ExplainSpeaking | Yield inversion, soft-landing and reverse currency wars: A glossary for the troubled global economy How bad is it for the rupee?Ĭhart 1 shows the rupee’s exchange rate against the dollar. All CFDs (stocks, indexes, futures) and Forex and cryptocurrency prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes.
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