Indian Rupee (INR) Becoming Stronger!

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Day in and day out most news papers are reporting that Indian Rupee (INR) is becoming weaker. Is this really true? On closer analysis it appears that this news is one sided and that it is a simplistic way of approaching the subject!

Let us look at how Indian Rupee (INR) is performing against a few foreign currencies by comparing their exchange rates now in 2022 with those in Sep 2021:

Currency           2022    2021
1 EUR =  INR   80.17   87 
1 GBP =  INR   94.70   101 
1 JPY  =  INR     0.58   0.70 
1 USD =  INR   79.60   74 

So, while INR has become stronger against Euro, British Pound, and Japanese Yen it has become weaker only against US$!

Let us trace the movement of INR and other currencies against US$. This shows that most currencies, including INR, have depreciated against US$:

Currency Feb 2022  Jul 2022  Change%
INR          75.7           79.7          5.3
EUR           0.9             1.0        11.2
JPY         115.3         137.1       18.8
GBP            0.7             0.8       12.2
RUB         87.3            61.8     -29.2

Therefore, it is a fact that INR has weakened against the US$ but not so against other currencies; also every major currency has weakened. The rupee's fall against US$ has been mainly due to a rise in crude oil prices, persistent foreign capital outflows, and US$'s international reserve currency status. 



World Bank's June 2022 'Global Economic Prospects' says about India's outlook:
"In India, growth is forecast to edge down to 7.5 percent in fiscal year 2022/23, with headwinds from rising inflation, supply chain disruptions, and geopolitical tensions offsetting buoyancy in the recovery of services consumption from the pandemic. Growth will also be supported by both private and public fixed investment, buoyed by government incentives and reforms to improve the business climate."

INR is Going Global

Another indicator of why INR is becoming stronger is that Indian Rupee is going global and now international trade can be conducted in Indian Rupees and Indian traders can settle their foreign business in INR. Till now international trade has to be done in convertible currencies like the US$, Euro, or Pound Sterling. You can find out the detailed procedure in this video:


This step by Reserve Bank of India (RBI) will allow Indian businessmen carry out trade in Rupees with countries like Russia, Iran, and the neighboring ones, causing an increase in demand for Rupee and reduced demand for US Dollar.


Location: Kozhikode, Kerala, India

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