Depreciation of the INR and its volatility less as compared to its EME peers, notes RBI Guv

The RBI governor while addressing its fifth bi-monthly monetary policy stated that during 2024-25 (April-November), the Indian rupee (INR) depreciated by 1.3% largely due to pressure from strengthening US Dollar and selling pressure by foreign portfolio investors in October and November. Nevertheless, both the depreciation of the INR and its volatility was less as compared to its EME peers, reflecting Indias strong macroeconomic fundamentals and improvement in external sector outlook, the governor noted. On a financial year basis (April-November), the Indian rupee (INR) registered lower depreciation (-1.3 per cent) against the US dollar as compared to higher depreciation of some of its emerging market peers like Vietnamese dong (-2.1 per cent), Philippine peso (-4.2 per cent), Turkish lira (-6.7 per cent), Russian ruble (-14.1 per cent), Brazilian real (-16.6 per cent), Argentine peso (- 15.0 per cent) and Mexican peso (-19.0 per cent). During 2024-25 so far (April-November), the INR was the least volatile with coefficient of variation of 0.4 per cent amongst peer EME currencies, including - Chinese yuan, Vietnamese dong, Philippine peso, Indonesian rupiah, Chilean peso and Turkish lira, the annexure to the document stated.

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