The Indian rupee (INR) has been impacted by a mix of geopolitical and economic factors recently, leading to a steady weakening against the US dollar. Analysts have noted a current exchange rate of INR to USD at approximately 0.011485, marking a decline of 1.5% from its 3-month average of 0.011663 and reflecting 90-day lows. This downturn aligns with broader concerns over surging energy prices, which have stoked inflation fears and may necessitate interest rate increases in India. As a significant oil importer, India is particularly sensitive to fluctuations in global crude prices, further complicating the INR's outlook.
The re-imposition of tariffs by the U.S. under President Trump has stirred uncertainty across Asian currencies, including the INR. Economic forecasters have highlighted that mixed influences surrounding Trump’s policies are contributing to a phase of volatility in the currency markets. The ongoing trade tensions, particularly with China, have additionally pressured investors, leading to a sell-off of Asian currencies. Experts suggest that the rupee's current valuation reflects a broader stability despite these external challenges.
Observations on INR’s performance against other major currencies reveal varied movements. The INR to EUR rate stands at 0.009941, which is 2.0% below its 3-month average of 0.010148, showcasing a range of 0.009831 to 0.010617. Meanwhile, against the GBP, the INR is slightly below its average at 0.008600, just 0.7% off the 0.008658 average. The INR has performed relatively well against the JPY, currently at 1.7047, which is 0.5% above its 3-month average of 1.696.
Analysts caution that the rupee's risks are currently "broadly balanced,” yet continued geopolitical unrest, particularly the rising tensions with Pakistan, alongside economic pressure from U.S. policies, could lead to further fluctuations. As such, stakeholders should remain vigilant and consider these multifaceted influences when planning international transactions.