EconomyExternal
Is the rupee becoming cheaper against trading partners?
The rupee fell 6.9% against a basket of trading partners' currencies over the year to Aug 2026, after adjusting for inflation. This is its real effective exchange rate.
Written for readers following India's external accounts. Data checked on 25 Oct 2026.
The rupee after adjusting for inflation
The rupee fell 6.9% against a basket of trading partners' currencies over the year to Aug 2026, after adjusting for inflation. This is its real effective exchange rate. Before adjusting for inflation, the rupee fell 8.6% against the basket over the year to Aug 2026. This is the nominal change.
Real and nominal changes against the currency basket
Yearly change, %. RBI trade weights.
How to read it. Below zero, the rupee has weakened against the basket. The nominal line follows exchange rates alone; the real line also accounts for inflation in India relative to its trading partners.
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Where does the real rupee sit in history?
The rupee's inflation-adjusted index stood at 92.0 in Aug 2026, above 24% of readings since Apr 2004. That places it in its history; it cannot tell us what the rupee should be worth.
The real effective rupee index
RBI trade-weighted basket. Base 2015–16 = 100.
How to read it. A higher index means a more expensive rupee after allowing for inflation relative to trading partners. The chosen starting value cannot tell us what the rupee should be worth.
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Does another currency basket tell the same story?
The Bank for International Settlements (BIS) puts the rupee's inflation-adjusted fall at 6.0% over the year to Sept 2026. It uses a different currency basket from the RBI.
BIS's broader rupee basket
Yearly changes, %. Compare directions, rather than index levels on different bases.
How to read it. Check whether this different currency basket shows the rupee moving in the same direction. Agreement between the measures still cannot establish the rupee's fair value.
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Is the RBI buying or selling dollars?
The RBI bought a net US$18.7 billion in the spot market in Jul 2026.
RBI net dollar purchases in the spot market
Recent monthly observations, US$ billion. Positive means purchases, negative means sales.
How to read it. Positive bars show net dollar purchases by the RBI; negative bars show net sales, which absorb rupees. These transactions explain only part of the change in reserves, since asset prices and exchange rates also move.
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What has the RBI committed to do later?
At the end of Jul 2026, the RBI had committed to sell a net US$136.8 billion of dollars at future dates. This is its net short forward position.
The RBI's outstanding forward book
Month-end stock, US$ billion. Positive is net long dollars; negative is net short.
How to read it. Below zero, the RBI has committed to sell more dollars than it will buy at future dates. These outstanding commitments can mature or be renewed; they differ from transactions made during a month.
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Spot figures count transactions during the month; the forward book records commitments still outstanding at month-end. Neither directly measures pressure on the rupee on any single trading day.
What the numbers can't tell you
- History cannot tell us the rupee's fair value
- The real rupee index depends on the currencies in the basket and their inflation rates. Its base and past range cannot establish a fair exchange rate or predict where it will go.
- Reserves change for several reasons
- Gold prices, exchange rates and income can change reserves without the RBI buying or selling dollars. Monthly spot transactions and outstanding forward commitments measure different things, so neither can simply be subtracted from reserves recorded on another date.
- The figures arrive at different times
- Quarterly current-account and debt figures can lag the reserve, trade and investor-flow data. Check each date: an older figure tells us less about India's position today.
- Past figures can be revised
- These charts use the latest available revisions. Import cover allows for a publication delay before using an import figure, but the history cannot recreate the figures readers would have seen at the time.
The workings
The question
Data
Tables and downloads accompany calculated measures. RBI level series are shown as charts only. Bundles are listed in data status.