RBI says INR drops 1.7% against US dollar in Aug-25

RBI noted in a latest update that the Indian rupee depreciated by 1.7% against the US dollar in August amidst mixed performance of major currencies. This reflected escalating India-US tariff tensions, FPI outflows and a strengthening US dollar. In real effective terms, the Indian rupee depreciated in August. The depreciation in real effective exchange rate was mainly driven by depreciation in nominal effective exchange rate with a marginal relative price effect. India’s foreign exchange reserves remained adequate, providing a cover for more than 11 months of goods imports and for more than 95 per cent of the external debt outstanding at end-March 2025.