📰 Indian Rupee Becomes Asia's Worst-Performing Currency

The Indian Rupee (INR) has recently taken an unfortunate spotlight by becoming Asia's worst-performing currency in 2025. Despite efforts from the Reserve Bank of India (RBI) and government policy interventions, the rupee has continued its downward slide against major global currencies like the US Dollar and Euro.



📉 What's Behind the Fall?

  • Rising Crude Oil Prices: India imports nearly 85% of its crude oil. Higher global oil prices increase India's import bill, putting pressure on the rupee.
  • FII Outflows: Foreign institutional investors (FIIs) have been pulling money out of Indian markets, leading to reduced foreign exchange inflows.
  • Geopolitical Uncertainty: Conflicts in regions like the Middle East and continued global inflation have made investors flock to “safe haven” currencies like the USD.
  • Trade Deficit: India's trade deficit continues to widen, with imports outweighing exports, further weakening the rupee.
  • Global Interest Rates: Higher interest rates in the U.S. and Europe have made their assets more attractive, leading to capital flight from emerging markets like India.


💸 How Does This Affect You?

The weakening rupee can have a direct and indirect impact on everyday life:

  • Imported Goods Get Costlier: Electronics, fuel, and other imports become more expensive.
  • Education Abroad Becomes Costlier: Students planning to study abroad may face increased tuition and living costs.
  • Travel Expenses Rise: International travel becomes costlier due to a weaker currency exchange rate.
  • Inflation Woes: A weak rupee contributes to overall inflation, especially for imported commodities.


📊 Rupee vs. Other Asian Currencies

In 2025, the rupee has underperformed compared to regional peers like:

Rupee vs. Other Asian Currencies
Currency YTD Change (%)
Indian Rupee -3.6%
Chinese Yuan -1.1%
Indonesian Rupiah -0.8%
Thai Baht -1.2%
Malaysian Ringgit -0.5%

Source: Bloomberg / RBI data as of May 2025



🛡️ What’s Being Done to Stabilize the Rupee?

  • Selling USD from forex reserves to stabilize INR
  • Intervening in currency markets
  • Monitoring inflation and using monetary tools to control volatility

However, experts suggest structural reforms, export promotion, and a stable investment climate are needed for long-term rupee stability.



📌 Conclusion

The rupee's status as Asia's weakest currency is a warning sign that cannot be ignored. While some short-term volatility is expected in global markets, consistent policy reforms and strong macroeconomic fundamentals are crucial for stabilizing the Indian currency.