Indian Rupee Drops to Lifetime Low Against the Dollar

The exchange rate from Indian rupees to U.S. dollars has been worsening since mid-September, with the currency hitting a new low at the beginning of December. According to exchange rates sourced from investing.com, one rupee is now worth 1.18 U.S. dollars, which marks a historic low for the currency. The reasons for this can, in part, be traced back to the U.S. election and the expected influence the incoming President Donald Trump will have on international markets.

For example, President-elect Trump has threatened 100 percent tariffs on BRICS nations if they turn away from the U.S. dollar as their main trading currency, which has negatively affected the rupee. Additionally, FX Street sees the "disappointing Indian macroeconomic data, persistent foreign fund outflows and the renewed Greenback demand" as further issues putting pressure on the Indian currency.

Apart from dropping exchange rates for the rupee, India has also suffered a setback in GDP growth in the third quarter of 2024. While analysts and experts predicted year-over-year growth of between 6.5 and 6.8 percent, the emerging market's GDP only grew by 5.4 percent compared to the same period in 2023. This can most likely be traced back to the lower output in the manufacturing and utilities sectors as well as lower urban consumption.