rupee depreciation

Foreign portfolio investors are experiencing their worst annual equity selloff in FY25, with outflows reaching Rs 1.5 lakh crore. Most of the selloff has occurred in the secondary market, while domestic investors have responded with strong investments, achieving a record Rs 4.7 lakh crore in FY25. Despite net selling, FPIs remain buyers in the primary market.

India’s forex reserves declined by $1.781 billion, hitting $638.698 billion on February 28. Despite intermittent gains, reserves have generally dropped since their all-time high in September. The decline is largely attributed to the RBI’s efforts to stabilize the Rupee.

IndusInd Bank has identified valuation losses in its forex derivative contracts that could impact its net worth by up to 2.4%, or around Rs 1,530 crore. The bank has assured that the losses pertain to FY24 and earlier, and they are working with an external adviser to review and address these discrepancies.

Stock market today: Key stock indices Sensex and Nifty ended lower after initial gains in a volatile session on Monday, affected by selling in industrials and oil & gas shares during the final hour.

Falling rupee and rising hotel tariffs have made overseas holidays more expensive for Indians, with a 15%-20% increase in costs compared to last year. European and Southeast Asian destinations are most affected. Despite the hike, travel interest remains high, with more bookings for exotic locations. The strengthening dollar and domestic travel costs are also contributing factors. Free e-visas from several countries are boosting interest.

The rupee fell 51 paise, closing at 87.2 per US dollar, marking its sharpest decline in three weeks. Regional currency weakness, importer hedging, and dollar demand pressured the currency. The fall is linked to the expiry of NDF contracts and weak sentiment in Asian markets. Analysts expect the rupee to depreciate further with the pace depending on RBI's interventions and foreign outflows.

A weak rupee is increasing costs for Indian students studying abroad, exacerbated by tighter post-education work visa norms in the UK and Canada. This could lead to longer loan repayment periods or higher EMIs. Experts suggest locking in foreign exchange rates early and seeking scholarships to reduce financial burden, while recommending students to focus on emerging fields for better job prospects.

A depreciating rupee might pose a downside risk to India's inflation by increasing the prices of imported goods, according to Centrum Broking. However, with declining food prices and steady Rabi sowing, retail inflation is expected to remain low, providing the RBI room for further rate cuts.

Union finance minister Nirmala Sitharaman cites former RBI Governor Raghuram Rajan during her Lok Sabha address concerning the rupee's depreciation against the dollar. She highlights that currency fluctuations have impacted major global economies, noting a 6.5% increase in the dollar index between October and January.

Foreign funds have withdrawn over Rs 1 lakh crore from the Indian stock market in 2025, impacting investor sentiment and causing the rupee to weaken. This outflow, combined with a strong dollar and rising US bond yields, has led to an ongoing market decline and increased volatility.

Stock market crash: It's mayhem in the Indian stock markets for the last few months with Sensex and Nifty correction entering double-digits. What should investors do? Where can you put your money, if not in equity markets? We take a look: