The Indian Rupee (INR) dropped to its lowest value ever, 85.73, compared to the US Dollar on Friday, December 27. This decline was due to strong demand for the dollar, marking the ninth consecutive day of the Indian Rupee’s fall. So far this year, the Indian Rupee (INR) has lost 3% of its value compared to the US Dollar. This means the Rupee is likely to end the year lower for the seventh year in a row. Furthermore, if this trend continues, December will be the Rupee’s worst month in two years.
The Indian Rupee (INR) has fallen below 85.50 for the first time ever. According to a trader, this drop is partly due to the end-of-month expiry of currency contracts and increased demand from importers who need to buy dollars.
The Rupee has been hitting new lows after India’s trade deficit (the difference between imports and exports) reached a record high level of $37.8 billion in November. Additionally, this is because global demand is weakening, which affects India’s exports, while imports remain high.
Indian Rupee Dropped: Other Currencies
The Indian Rupee (INR) has dropped quickly, but it hasn’t fallen as much as other emerging market currencies. Until November 30 in FY25, the Indian Rupee has remained relatively stable, with minimal fluctuations, compared to other major currencies. Compared to other major currencies, the Rupee has been relatively in a better position, with a moderate 1.2% decline since April 2024. This is better than the South Korean Won (down 2.2%) and Brazilian Real (down 12.7%) against the US Dollar.
On the other hand, the Rupee’s drop to record lows is actually good news for pharmaceutical companies, as they earn a significant portion of their revenue from exporting medicines.
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