The exchange rate between the Indian Rupee (INR) and the Euro (EUR) has shown relative stability, with the INR to EUR rate currently at 0.009700, fluctuating within a 3.6% range over the past three months. Market analysts suggest that this stability could be influenced by a combination of ongoing global economic developments and specific factors affecting both the Indian and Eurozone economies.
The Euro has recently gained some support against the US Dollar, partially due to ongoing geopolitical tensions and market expectations concerning the European Central Bank's (ECB) monetary policy. While the euro appreciated significantly against the USD earlier this year, analysts note that a shift towards a more dovish stance from the ECB, potentially lowering rates from the current 4.0% to 3.5% by late 2025, is likely to exert downward pressure on the euro's strength. Additionally, disappointing industrial production figures from the Eurozone could limit the euro's gains in the near term.
On the Indian side, the INR has experienced significant downward pressure. Recent reports indicate that the rupee hit an all-time low against the US dollar, influenced by heightened H-1B visa fees and reduced foreign capital inflows. Continuous demand from importers for US dollars amidst concerns over tariffs and immigration policy has further complicated the rupee's position. The Reserve Bank of India's recent interventions, expanding its dollar forward positions, highlight attempts to stabilize the rupee, but challenges from weak manufacturing exports and narrowed interest rate differentials with the U.S. persist.
Additionally, fluctuations in oil prices are critical for both currencies, given India’s status as a major oil importer. Current oil prices are trading at $64.29, which is slightly below the three-month average, indicating a volatile market that could impact the INR's strength further as oil prices remain a key driver of inflation and currency stability in India.
Overall, the forecast for the INR to EUR exchange rate hinges on a complex interplay of ECB policy shifts, Indian economic resilience, and global market sentiments surrounding geopolitical tensions and energy prices. Stakeholders involved in international transactions should monitor these developments closely, as they may present opportunities for more favorable exchange rates.
