Is the world helping or hurting Indian shares?
External balances and the dollar: who needs foreign money, and what is the dollar doing?
India ran a current account deficit of 0.4% of GDP in 2025, so it needs a steady inflow of foreign money. Its reserves cover 8.9 months of imports. Against the dollar, the rupee was 9.0% weaker in Aug 2026 than a year earlier; 7 of the 13 currencies here lost ground to the dollar.
Written for investors watching the rupee, foreign flows and the dollar. Data to 2 Oct 2026.
Current accounts
The current account is what an economy earns from the world (exports, income, remittances) minus what it pays. A deficit has to be financed by foreign capital, which is why deficit economies feel it first when global money tightens. Latest full year: 2025. The euro area is not in our World Bank series.
Current account balance, 2025
% of GDP. Positive = surplus. * = an earlier year.
How to read it. Right of zero, the economy lends to the world; left of zero, it borrows from it. The open circle is the year before.
- Korea +6.6%; the year before +5.3%
- Japan +4.9%; the year before +4.6%
- China +3.8%; the year before +2.5%
- Indonesia −0.1%; the year before −0.6%
- India −0.4%; the year before −0.9%
- South Africa −0.4%; the year before −0.6%
- Mexico −0.4%; the year before −0.9%
- Turkey* −0.8%; the year before −3.6%
- Canada −0.9%; the year before −0.5%
- United Kingdom −2.4%; the year before −3.0%
- Australia −2.7%; the year before −2.3%
- Brazil −2.9%; the year before −3.0%
- United States −3.6%; the year before −4.0%
Current accounts by economy
Annual, % of GDP, from 2000, shared scale.
How to read it. China, Japan and Korea ran a surplus in every year since 2000; United States and United Kingdom a deficit in every year. Watch for a deficit that widens quickly.
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Reserves
Foreign exchange reserves are a central bank's buffer against a sudden stop in foreign money. A common rule of thumb treats three months of imports as the floor. India's reserves cover 8.9 months, measured against imports in 2025.
FX reserves in months of imports, Jun 2026
Reserves including gold, divided by a month of imports of goods and services in the latest full year. Eight emerging economies.
How to read it. Longer bars mean a bigger cushion. The open circle is a year earlier; valuation changes in gold and the dollar move it as well as intervention.
- China
13.8; a year earlier 13.3 - Brazil
11.2; a year earlier 10.9 - India
8.9; a year earlier 9.4 - South Africa
7.3; a year earlier 7.1 - Korea
6.9; a year earlier 6.6 - Indonesia
5.9; a year earlier 6.3 - Turkey
5.6; a year earlier 5.8 - Mexico
4.3; a year earlier 4.3
Reserves, change on a year earlier
Including gold at market value, % y/y, monthly from 2015, shared scale. Turkey left out for scale. Derived from IMF data.
How to read it. Falling reserves usually mean a central bank sold dollars to support its currency; rising reserves, that it bought them or that gold rose.
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Currencies
Two ways to read a currency. Against the dollar, which is how most people see it. And against all trading partners after inflation, the real effective exchange rate: the better guide to whether a currency is dear or cheap. India's real rate sits at the 16th percentile of its history since 2000.
Currencies against the US dollar, Aug 2026
% change in units per dollar on a year earlier, monthly average. Positive = the currency weakened.
How to read it. Right of zero, the currency lost value against the dollar. The open circle shows the same change a year earlier.
- Turkey +17.3%; a year earlier +21.2%
- Indonesia +9.2%; a year earlier +3.5%
- India +9.0%; a year earlier +4.3%
- Japan +7.5%; a year earlier +1.0%
- Korea +0.9%; a year earlier +2.8%
- Canada +0.7%; a year earlier +1.0%
- Euro area +0.3%; a year earlier −5.3%
- United Kingdom −0.7%; a year earlier −3.8%
- Brazil −5.6%; a year earlier −1.9%
- China −6.1%; a year earlier +0.3%
- Australia −8.6%; a year earlier +2.4%
- Mexico −8.8%; a year earlier −2.2%
- South Africa −8.9%; a year earlier −1.7%
Real exchange rates against their own history
Percentile of the latest BIS real effective exchange rate among all months since January 2000. 100 = the dearest since 2000.
How to read it. Right of the median line, the currency is dearer than usual against its trading partners after inflation, which makes exports harder to sell; left of it, cheaper.
- United States
83 - Australia
83 - Mexico
80 - United Kingdom
63 - Euro area
60 - China
56 - South Africa
54 - Brazil
39 - Turkey
26 - India
16 - Canada
14 - Indonesia
12 - Korea
8 - Japan
1
Real effective exchange rates by economy
BIS broad (64 economies), index 2020 = 100, monthly from 2005, shared scale.
How to read it. Up means dearer. India's line has been the steadiest of all fourteen since 2005: the rupee's fall against the dollar has roughly matched India's higher inflation.
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The dollar
The dollar is the world's funding currency: when it rises, money tends to leave emerging markets. The Federal Reserve's broad index was 1.1% higher than a year earlier in the week to 2 Oct 2026. The dollar's share of the world's allocated reserves was 56.7% in Q2 2026.
The dollar's trade-weighted indices
Federal Reserve H.10, nominal, Friday readings, from 2006.
How to read it. Up is a stronger dollar. The emerging-economy index has risen the most since 2006, which is the long slide of emerging currencies, the rupee among them.
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The real dollar
Federal Reserve real broad index, monthly from 2006, adjusted for inflation differences.
How to read it. The band is the middle half of all months since 2006. Above it, the dollar is dear by its own standards, which has tended to weigh on emerging-market assets.
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Currency shares of world reserves
IMF COFER, share of allocated reserves, quarterly.
How to read it. The dollar's share has drifted down for two decades, but no single currency has taken its place.
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Dollar credit to emerging-market borrowers
BIS global liquidity indicators: dollar loans and bonds to non-banks, % y/y, quarterly. Emerging markets: 7.8% in Q1 2026.
How to read it. Dollar credit to emerging markets grows fast when the dollar is weak and money is easy, and contracts when they reverse.
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Foreign money in India
Does any of it move money into India? Less than you'd think. Over the full period, weekly foreign equity flows into India correlate with changes in US net liquidity, the 10-year yield and the dollar at between −0.02 and −0.09: close to nothing. The steadiest monthly link is with the dollar, at −0.33. This describes; it does not show cause.
Rolling 52-week correlation of weekly FPI equity flows with…
Each line: correlation of FPI net equity buying with the weekly change in that driver.
How to read it. Zero means no relation. Lines that wander across zero, as these do, mean the link comes and goes; none holds steady.
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FPI inflows against the dollar
Both standardised to z-scores so they share one axis. Monthly from 2003.
How to read it. When the lines move in opposite directions, a stronger dollar went with weaker inflows. It is the clearest of the links, and still a loose one.
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What it means for India
India runs a current account deficit, holds large reserves and has a real exchange rate that has moved less than its dollar rate. The two charts below are the rupee against the dollar and against all its trading partners.
USD/INR
Weekly, Federal Reserve H.10 noon rate in New York; it lags by up to a week.
How to read it. Up means a weaker rupee. For RBI and FBIL reference rates, see the India macro pages.
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The rupee against 64 currencies
BIS broad effective exchange rates, monthly from 1994. A fall is depreciation.
How to read it. The nominal rate has fallen steadily; the real rate, which allows for India's higher inflation, has moved far less.
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The workings
Data
Every chart has a table view, a CSV download and a link to its published JSON. Bundles are listed in data status.