Indian rupee at all-time low in 2024: RBI interventions have also helped prevent a sharp fall in the rupee. India’s forex reserves have declined by $52 billion. (Image: Pexels)
By Mihika Sharma
The Indian rupee has depreciated 2.3% against the dollar in 2024, reaching a record low of 85.12 (as of December 23). However, at the same time, rupee volatility remains low compared to historical levels and other Asian currencies. High US yields and a strong dollar have primarily weighed on the rupee, while rangebound oil prices and RBI interventions have provided some support.
Dollar index at 2-year high putting pressure on global currencies
The 10-year US yield has risen 72 bps in 2024 to 4.59%, and the dollar index has strengthened 6.6% to around 108, its highest in two years. Expectations of inflationary policies under the Trump administration and hawkish guidance from the FOMC – signalling 50bps of rate cuts in 2025, down from 100bps earlier – have driven US yields and the dollar higher. This has led to capital outflows from emerging markets, putting pressure on their currencies, including the rupee.
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