Indian rupee drops 2.8% against dollar in 2025

The Indian rupee has fallen 2.8% against the dollar in 2025, despite recovering from its all-time low of 23.95 to the dirham. This decline continues a trend from 2024, with the rupee lagging behind other Asian currencies. Recent improvements in the rupee's value are linked to a weaker Dollar Index, which has dropped from a peak of 110 in January to 103.7. However, the rupee remains under pressure due to factors like foreign fund outflows from Indian equities and a potential erosion of interest rate advantages. HSBC's report indicates that the rupee may face further challenges, with expectations of it reaching 88 against the dollar by the end of 2025. The report highlights concerns about India's foreign exchange position and the impact of recent interest rate cuts.