The rupee is projected to face a slight depreciation in 2025 due to fluctuations in foreign portfolio investor flows and a potentially stronger US dollar according to a Bank of Baroda report.
Despite a 2.8% dip in 2024, the Indian Rupee has outperformed various global currencies with the help of the Reserve Bank of India's interventions in the forex market.
As of December 20, 2024, India’s foreign exchange reserves were at $644.3 billion, supported by a favorable current account balance and declining crude oil prices.
Optimism around India's equity markets is rising for 2025, boosted by expected growth in rural spending and government expenditure.
The RBI is considering a potential rate cut in February 2025, aiming to foster economic growth while maintaining a fiscal deficit target of 4.9% of GDP.
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