Updated February 8th, 2024 at 15:40 IST

Rupee's journey from rollercoaster ride in 2013 to remarkable stability in 2023

The government released a white paper in Parliament on the country's economy before 2013 and after PM Narendra Modi came to power in 2014.

Sankunni K
Rupee stability post-2014
Rupee stability post-2014 | Image:Freepik

Indian Rupee performance: The government of India on Thursday, February 8, 2024, released a white paper in Parliament on the country's economy before 2013 and after Prime Minister Narendra Modi came to power in 2014. Analysing three dated reports from the white paper, it becomes evident how the Rupee's fortunes have evolved over the years.

Turbulent times

The year 2013 saw the Indian Rupee grappling with severe challenges, as reported by IANS on December 23, 2013. The currency experienced a sharp decline, hitting a record low of 68.85 against the US Dollar. Its value plummeted, losing 27 per cent between June and August due to factors like:

  • Speculation over US stimulus tapering (withdrawal of quantitative easing)
  • Weak domestic macroeconomic fundamentals: Slow growth, high inflation, and widening deficits
  • Foreign investor pullouts from Indian equities

Shift towards stability

Contrastingly, a report by the Wall Street Journal on November 28, 2023, highlighted a remarkable turnaround in India's economic landscape post-2014. The Indian economy witnessed substantial growth, buoyed by robust reforms and a surge in foreign investments. The Rupee's stability emerged as a hallmark of India's economic success story, with minimal depreciation against the US Dollar. Factors such as solid central bank management, a thriving economy, and investor-friendly reforms played pivotal roles in bolstering the Rupee's resilience.


In 2023, it lost less than 1 per cent of its value against the Dollar, compared to depreciations in other major currencies.

Key factors contributing to this stability include

  • Prudent management by the Reserve Bank of India (RBI): Building robust foreign exchange reserves and intervening strategically in the market.
  • India's economic growth: On track to exceed $4 trillion GDP, attracting foreign investment.
  • Government reforms: Improving ease of doing business, simplifying taxes, and strengthening bankruptcy laws.

Recent trends and future outlook

While the Rupee has been relatively stable, some challenges remain:

  • Persistent demand for Dollars from importers
  • Geopolitical tensions and rising oil prices lead to foreign outflow.

Despite these hurdles, the outlook for the Rupee appears positive, with potential for appreciation in 2024 due to:

  • Inflows expected from India's inclusion in the JP Morgan bond index
  • Anticipated rate cuts by the RBI following the US Federal Reserve
  • Optimistic forecast for an uptick in economic activity

Published February 8th, 2024 at 15:40 IST

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