Indian Rupee General Info
The Indian rupee gets its name from the rupiya – a silver coin first produced in the sixteenth century.
Rupee trades make up around 1% of the total volume of the foreign exchange market. This market share is comparable to currencies from other major emerging market economies, such as South Africa, Brazil and Russia, but falls some way short of the 4% share taken by the Chinese yuan – the most actively traded emerging market currency.
Importantly, the rupee has strong seasonal characteristics. The currency typically falls in value every second-quarter (April-to-June) due to India’s heightened gold demand heading into the Hindu festival of Akshaya Tritiya. Heavy rains between June and September can also depress industrial production in the country and weaken exports, which weigh on the currency.
The rupee’s all-time low against the US dollar came in February 2016 when USD/INR reached 68.80 (INR/USD 0.0145). Its all-time high came in March 1973 when USD/INR traded at just 7.19 (INR/USD 0.139). More recently, since 2007, the rupee was at its strongest in November 2007 when USD/INR fell to 39.10 (INR/USD 0.0256).INR Foreign Transfers INR Travel Money Read our Travel Guide to India
Indian Rupee - Recent Performance
The rupee had a difficult September, ending the month at 65.44 per dollar, which meant that it had given back 40% of the 2017 gains it once held over USD (the rupee had been as strong as 63.53 per dollar on August 3rd).
The rupee had been one of the stars of the early part of the year, strengthening 6% against the dollar between January and April. However, between May and August, seasonal factors and a drop in market volatility meant that USD/INR spent much of the June-August period drifting sideways along the 64.0 handle.
While we could blame Donald Trump for the rupee’s September nosedive (Trump reignited the US reflation trade with September’s proposed corporate tax cuts) the reality is that the rupee remains weak by recent standards against many of the majors, especially the Canadian dollar, euro and British pound.
In September, AUD/INR once again tested 52.0, and once again was repelled. This resistance level is one of the strongest in FX and a break above it could see the rupee enter a long-term decline against the Australian dollar.