INR vs USD: Why a stronger greenback doesn’t imply the rupee fell by the identical proportion, explains Samir Arora

Samir Arora, skilled fund supervisor and market veteran, has stepped in to make clear a widespread false impression about easy methods to appropriately calculate depreciation of the Indian Rupee (INR) versus the appreciation of the US Greenback (USD). His rationalization comes at a time when the rupee is underneath intense stress, having slumped to contemporary document lows towards the greenback amid commerce tensions with the USA.

Arora, founder and fund supervisor at Helios Capital, used social media to clarify that headlines usually state the greenback has appreciated by a sure proportion towards the rupee, however that doesn’t imply the rupee has depreciated by the identical proportion. The distinction arises from how forex values are quoted and the way depreciation ought to truly be measured.

“If INR goes from USD 1 = 61 to USD 1 = 88, the greenback has appreciated by 44%. That doesn’t imply the rupee has depreciated by 44%. The truth is, the rupee has depreciated by 30.6% with these numbers,” Arora wrote on X. “Not good in any case, however I’m speaking arithmetic.”

To make it simpler to know, he gave a round-number illustration. If the alternate price weakens from ₹50 per greenback to ₹100 per greenback, the greenback’s worth seems to have doubled — a 100% appreciation. However for somebody holding ₹100, the image seems very completely different. Earlier, that ₹100 would fetch $2, whereas now it buys solely $1. In different phrases, the rupee’s buying energy in greenback phrases has halved — a 50% depreciation, not 100%.

Arora pressured that it from the angle of rupee holders offers a clearer image for buyers and extraordinary residents. Whereas the optics of “USD appreciating by 100%” could sound alarming, the precise hit to rupee worth is completely different and should be measured appropriately.

His clarification was in response to wealth skilled Akshat Shrivastava, who had earlier posted in regards to the rupee’s decline. Shrivastava famous that ten years in the past, the rupee was at 61 to the greenback and is now near 88 — calling it a 44% drop in comparison with the USD. He posed the broader query of why currencies lose worth in any respect.

Shrivastava defined that the demand-supply stability of a forex determines its stage. Provide is managed by the federal government, which decides how a lot to print. Printing an excessive amount of forex dangers fueling inflation and eroding worth. Demand, nevertheless, is market-driven — decided by commerce flows, funding, and confidence within the economic system. When demand weakens relative to produce, the forex falls.

Arora’s level enhances this, underlining that rupee depreciation ought to be assessed from what number of fewer {dollars} one should buy with the identical rupee, fairly than merely mirroring the greenback’s proportion appreciation.

The timing of the talk is important. The Indian rupee dropped 0.4% to 87.9763 per greenback this week, breaching its earlier all-time low of 87.9563 touched in February. With this decline, the rupee has develop into Asia’s worst-performing forex in 2025, battered by persistent overseas outflows and exterior shocks.

The quick set off has been Washington’s imposition of fifty% reciprocal tariffs on Indian exports, focusing on labor-intensive industries similar to textiles, footwear, and jewellery. These sectors kind a big share of India’s shipments to the US, and analysts worry a steep decline in orders. Citigroup Inc. estimates the tariffs may shave 0.6–0.8 proportion factors off India’s annual GDP progress, a significant drag on the economic system.

Including gas to the sentiment, US Treasury Secretary Scott Bessent made dismissive remarks in regards to the rupee’s worldwide prospects. In an interview with Fox Information, he quipped: “There are a whole lot of issues I fear about. The rupee turning into a reserve forex is just not considered one of them.”

Bessent emphasised that the rupee is close to an “all-time low,” underscoring the greenback’s dominance in international commerce. His feedback adopted the Trump administration’s tariff escalation, which many see as a direct problem to India’s commerce competitiveness. The steep levies will make Indian merchandise considerably costlier for American shoppers, hurting exporters already fighting margin pressures.

The double blow of tariff pressures and forex weak spot has revived debate on India’s exterior vulnerabilities. For buyers, Arora’s clarification could not soften the quick market ache, nevertheless it highlights the significance of decoding numbers appropriately. Forex strikes affect every part from inflation expectations to overseas funding flows, and exaggerating depreciation can distort the narrative.

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