BS EDIT: Currency drivers: Rupee gains, trade risks, and what’s ahead

By Business StandardPublished On Mar 27, 2025

Rupee’s mixed FY25 performance

Up 2% in March, the rupee is among Asia’s best performers—yet still down 3% for FY25

Dollar strength unwinds

After rising 5% on US policy bets, the dollar index has eased—helping global currencies, including the rupee

FPIs return to equities

FPIs sold $14 bn in Jan–Feb. March saw buying resume in equities, though debt outflows continued

Tariff uncertainty looms

US tariff plans may disrupt trade. India could gain export space if it strikes a favourable deal

Macros still supportive

Low current account deficit and stable oil prices limit currency risk—for now

Allowing some depreciation

The rupee is overvalued. A mild fall could support exports amid global headwinds