USD to INR Analysis & Commentary

Updated on 8 Jan 2024

The USD to INR rate in December 2024 averaged around ₹85.13, with a high of ₹85.60 and a low of ₹84.672.

The US Dollar strengthened due to positive economic data from the US. Strong GDP growth figures and lower-than-expected inflation boosted investor confidence in the USD.

The Federal Reserve maintained a hawkish stance, signaling the possibility of further interest rate hikes in 2025. This made the USD more attractive to investors, leading to its appreciation against most currencies, including the Indian Rupee.

Rising global crude oil prices had a significant impact on the Indian Rupee. As India is one of the largest importers of crude oil, higher oil prices increased the demand for USD to pay for imports, putting downward pressure on the INR.

India's manufacturing and export sectors showed slower-than-expected growth in December, which also weakened the Rupee.

Moreover, significant outflows from Indian equities, with foreign investors selling approximately $11.7 billion worth, reduced demand for the INR, contributing to its depreciation.

December typically sees increased demand for the US Dollar from Indian corporates for year-end settlements, imports, and other financial obligations. This seasonal demand further contributed to the depreciation of the INR.

The RBI's interventions aimed at stabilizing the INR provided temporary relief but were not able to prevent the depreciating trend.

Overall, December 2024 was a challenging month for the Indian Rupee, as it depreciated against the US Dollar due to a combination of global and domestic factors.

As we move into 2025, the performance of the Rupee will depend on factors such as global oil prices, US Federal Reserve policies, and India's economic performance.

Source:

Reuters

Business Standard

Reuters

Reuters

Exchange Rate Analysis for Other Currencies Paired with INR