USD vs INR 2024: Why is Indian Rupee Falling Despite Dropping US Dollar Rates? Despite a weakening US dollar, the Indian rupee has remained range-bound and has not capitalized on favorable global conditions. While the US dollar index has fallen to around 101 from a three-month high of 106, reflecting a significant drop, the rupee has continued to trade within a narrow range. This scenario is surprising given the broader trend of appreciation among many Asian currencies and the positive macroeconomic indicators such as declining crude oil prices and strong foreign institutional inflows (FII) into Indian equities.
USD vs INR 2024
Experts attribute the Indian rupee’s lack of appreciation to substantial intervention by the Reserve Bank of India (RBI), which has been actively buying dollars to stabilize the currency. Additionally, the RBI’s strategy appears to be influenced by India’s high trade deficit with China and the performance of the Chinese yuan against the dollar. This has kept the rupee within a constrained range, despite other supportive factors that could have pushed it higher.
USD vs INR Recent Currency Trends
| Metric | Value |
| US Dollar Index | 101 (from a high of 106) |
| Indian Rupee Range | 83.80 to 84.05 |
| Recent High (USD/INR) | 84.00 |
| Recent Low (USD/INR) | 83.80 |
Performance of Asian Currencies
| Currency | Recent Trend |
| Japanese Yen | Strengthened against USD |
| Chinese Yuan | Appreciated against USD |
| Korean Won | Gained against USD |
| Thai Baht | Strengthened against USD |
Key Influences on the Rupee
| Influence | Description |
| RBI Intervention | Active buying of USD by RBI |
| Trade Deficit with China | High trade deficit impacting rupee stability |
| Crude Oil Prices | Decline in oil prices supports the rupee |
| Foreign Institutional Inflows | Strong inflows into Indian equities |
RBI’s Currency Management
| Action | Description |
| Dollar Purchases | RBI buying dollars to stabilize the rupee |
| Currency Band Control | Maintaining rupee within a specific range |
| Impact on Exchange Rates | Preventing sharp appreciation or depreciation |
Recent Economic Data
| Data | Description |
| US Dollar Index | Recent drop to 101 |
| Crude Oil Prices | Declined, benefiting the rupee |
| FII Inflows | Strong inflows into Indian markets |
| Trade Deficit | High deficit with China |
Analyst Views
| Analyst | Opinion | INR/USD Range |
| Amit Pabari, CR Forex Advisors | RBI’s intervention preventing rupee appreciation | 83.80 to 84.05 |
| Jigar Trivedi, Reliance Securities | Rupee likely to remain range-bound | 83.80 to 84.00 |
Impact of US Fed Rate Expectations
| Metric | Description |
| US Fed Rate Cut Bets | Increased expectations for rate cuts |
| Dollar Impact | Expected weakening of the USD |
| INR Response | Rupee not significantly strengthening |
Foreign Institutional Investment
| Investment Type | Description |
| Equity Inflows | Significant FII inflows into Indian stocks |
| Impact on Rupee | Should typically strengthen the rupee, but not observed |
Crude Oil Price Trends
| Trend | Description |
| Recent Decline | Oil prices have fallen |
| Impact on Rupee | Positive impact expected |
USD vs INR Technical Analysis
| Analysis | Description |
| Current Range | 83.80 to 84.05 |
| Resistance Level | 84.00 |
| Support Level | 83.80 |
RBI’s Strategy Justification
| Justification | Description |
| High Trade Deficit | Avoiding exacerbation of trade deficit impacts |
| Yuan Appreciation | Managing rupee depreciation against the yuan |
Market Reactions
| Reaction | Description |
| Range-Bound Trading | Rupee staying within a narrow range |
| Limited Currency Movement | Lack of significant appreciation |
Forecast and Predictions
| Forecast | Description |
| Short-Term | Expected to remain within current range |
| Medium-Term | Slight broadening of the range expected |
Factors Preventing Rupee Appreciation
| Factor | Description |
| RBI Intervention | Continuous buying of USD |
| Trade and Economic Conditions | High trade deficit with China and other factors |
Future Outlook
| Outlook | Description |
| Near-Term | Range-bound between 83.80 and 84.05 |
| Medium-Term | Possible slight range broadening |
USD vs INR Summary
Despite a weakening US dollar and positive global factors like declining crude oil prices and robust foreign institutional inflows, the Indian rupee has remained range-bound. This situation is primarily due to the Reserve Bank of India’s (RBI) active intervention in the forex market, absorbing substantial dollar inflows to stabilize the currency. Additionally, the high trade deficit with China and the performance of the Chinese yuan are factors contributing to the rupee’s restrained movement. Analysts expect the rupee to continue trading within a narrow band in the near term, with resistance at 84 and support around 83.80.
