Rupee at historic low: How 9% real depreciation could reshape India’s economy

The rupee has been in a downward spiral versus the US dollar - hitting new historical lows and even crossing the 90 mark. The depreciation has been steep, and even more on a real effective basis. In fact, the rupee is one of the worst performing major currencies. Experts are of the view that this weakness may persist in the near term, given the uncertainty of the India-US trade deal, and pressure on capital flows - and this can and will impact various macroeconomic variables in India, if it persists. A persistently weak rupee affects India through five major channels, influencing everything from inflation and imports to exports, corporate margins, and even investment decisions. While the short-term effects are mostly negative—such as raising costs and additional economic pressure—a w