New Delhi, Dec 23 In real effective terms, the Indian rupee remained stable in November, as depreciation of the INR in nominal effective terms was offset by higher prices in India compared to its major trading partners, according to the Reserve Bank of India’s (RBI) December Bulletin.
The rupee depreciated against the US dollar in November, pressured by the strengthening of the US dollar, muted foreign portfolio flows, and uncertainty surrounding the India-US trade deal.
“The volatility of INR, as measured by higher prices in the coefficient of variation, moderated in November from a month ago and remained relatively lower that most currencies. In December so far (up to 19), the INR depreciated by 0.8 per cent over its end-November level,” according to the Bulletin.
During 2025-26 so far (up to December 18), net FPI registered outflows, driven by equity segment. FPI flows turned negative in December following inflows in the previous two months.
The uncertainty surrounding India-US trade deal and investors’ caution around high domestic valuations kept net FPI flows to India muted in recent months, said the RBI in its Bulletin.
The registrations of external commercial borrowings (ECBs) moderated during April–October 2025, reflecting a slowdown in offshore fund raising activity. Net inflows from ECBs also stood lower than last year, A significant portion of the ECBs was mobilised for capital expenditure purpose.
Also, India’s current account deficit moderated in Q2 2025-26 over the same period last year, supported by a lower merchandise trade deficit, robust services exports and strong remittance receipts.
However, net capital inflows fell short of current account financing requirements, leading to a depletion in foreign exchange reserves.
Nonetheless, India’s foreign exchange reserves remain adequate, providing a cover for more than 11 months of goods imports and a cover for more than 92 per cent of the external debt outstanding, according to the RBI.
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