Rupee’s Performance in Global Market – Should Investors Worry?
The Indian rupee has been facing significant volatility in recent months, driven by a combination of global and domestic factors. With foreign portfolio investors pulling out over $11 billion in 2025 and the U.S. dollar strengthening, the rupee has depreciated notably. Forecasts suggest that the rupee could touch 88 against the U.S. dollar in the next six months. While the Reserve Bank of India (RBI) is intervening with a $10 billion dollar-rupee swap on February 28 , the big question remains: Should investors be concerned, or is this an opportunity? Why Is the Rupee Depreciating? Several factors have contributed to the rupee's recent decline: 1. Foreign Portfolio Outflows Foreign investors have been withdrawing funds from Indian markets, redirecting capital to economies offering better risk-adjusted returns, such as China and the U.S. These massive outflows put pressure on the rupee, leading to depreciation. 2. Strengthening of the U.S. Dollar The U.S. Fe...