Topic 5: RUPEE: FREE SLIDE

In January 2025, the Indian rupee experienced a notable depreciation against the U.S. dollar, declining from approximately ₹85.56 at the beginning of the month to around ₹86.50 by month-end. This weakening was influenced by several factors, including shifts in U.S. economic policies, key financial indicators, and interest rate decisions that bolstered the dollar's strength. Domestic challenges further exacerbated the situation. India's persistent trade deficit, particularly with China, remains a significant concern. In the fiscal year 2024, the trade deficit with China soared to $85.1 billion. Imports from China rose by 9.8% year-on-year, amounting to $65.89 billion, while exports to China dropped by 9.37%, totalling approximately $8 billion. This imbalance underscores India's reliance on Chinese imports and highlights structural vulnerabilities in its trade ecosystem. As India gears up for Budget 2025, strategic reforms aimed at reducing import dependency and strengthening domestic production are anticipated. Measures to encourage local manufacturing and enhance export competitiveness may help address these economic concerns. The rupee's depreciation was also influenced by inflationary pressures, heightened demand for dollars, trade tensions, and expectations surrounding the Reserve Bank of India's (RBI) monetary policy stance. Moving forward, interventions by the RBI and favourable domestic economic developments could contribute to stabilizing the currency in the coming months.



Top | Back
The information contained herein (the “Information”) may not be reproduced or disseminated in whole or in part without prior written permission from the Company. The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The document has been prepared based on publicly available information, internally developed data and other sources believed to be reliable. The directors, employees, affiliates or representatives (“Entities & their affiliates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy, reliability and is not responsible for any errors or omissions or for the results obtained from the use of such information. Readers are advised to rely on their own analysis, interpretations & investigations. Certain statements made in this presentation may not be based on historical information or facts and may be forward looking statements including those relating to general business plans and strategy, future financial condition and growth prospects, and future developments in industries and competitive and regulatory environments. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, they do involve several assumptions, risks, and uncertainties. Readers are also advised to seek independent professional advice to arrive at an informed investment decision. Entities & their affiliates including persons involved in the preparation or issuance of this document shall not be liable in any way for direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of the lost profits arising from the information contained in this material. Readers alone shall be fully responsible for any decision taken based on this document.
Copyright © 2024 Fintso