Pakistani rupee beats Indian rupee in last one year:National currency becomes the worst-performing major Asian currency

Over the past one year, the Pakistani Rupee (PKR) showed higher stability against the US Dollar compared to the Indian Rupee (₹). Official exchange rate records show that the Pakistani Rupee appreciated in value whereas the Indian Rupee depreciated by 1.8% against the greenback. Key exchange rate movement According to daily reference rate data from the Reserve Bank of India (RBI), the Indian Rupee fell from 87 per US Dollar to 95 per US Dollar over the last 12-month period. This movement represents a depreciation of 8.4%. During the same 12-month period, official exchange rate publications from the State Bank of Pakistan (SBP) show the Pakistani Rupee moved up from 279.50 per US Dollar to 278.65 per US Dollar. This movement marks a mild appreciation of 0.3% against the US Dollar. Reasons behind currency trends The State Bank of Pakistan (SBP) attributed the relative stability of the Pakistani Rupee to strict foreign exchange management, high central bank policy rates, and dollar inflows following approval of a $7 billion Extended Fund Facility by the International Monetary Fund (IMF). In contrast, reports from the Reserve Bank of India (RBI) highlight that the Indian Rupee faced downward pressure due to elevated global US Dollar demand, consistent Foreign Portfolio Investor (FPI) equity sell-offs, and routine trade balance adjustments. The RBI intervened periodically using foreign exchange reserves to control volatility rather than defend a fixed exchange rate level. Asian currency performance comparison: The table below compares the value and 1-year movement of major Asian currencies against the US Dollar, based on official central bank market releases: While the Pakistani Rupee recorded higher percentage stability over 12 months, underlying economic indicators present different structural realities. RBI monetary policy statements show India’s foreign exchange reserves stand at over $680 billion, offering substantial import cover and buffer against external shocks. Data published by the State Bank of Pakistan shows Pakistan’s foreign exchange reserves remain lower at approximately $11.2 billion, leaving its currency movement closely tied to IMF program conditions and strict import restrictions moving forward. Impact of rupee depreciation on India’s GDP and economy: A depreciating Indian Rupee directly impacts India’s Gross Domestic Product (GDP) by raising foreign import bills and driving domestic inflation. Official Reserve Bank of India records show that while a weaker currency supports service exporters, elevated crude oil costs strain the national current account deficit. How fall in rupee’s value impacts you? A depreciating rupee directly affects household budgets by increasing the prices of daily essential items and imported goods. Currency movement raises domestic fuel costs, inflates foreign education expenses, and increases retail prices for electronics and cooking oil across the country. Rising import costs drive up essential goods A weaker domestic currency reduces the purchasing power of the Indian Rupee against the US Dollar. Since India imports significant quantities of essential raw materials, domestic companies pay higher rupee amounts to purchase foreign goods. This mechanism is called imported inflation. Manufacturing companies often transfer these higher procurement costs to end consumers by increasing retail prices for daily household products. Higher transport costs push food prices upward Fuel is the primary component of national goods transport. India imports approximately 85% of its crude oil requirements. When the dollar grows stronger, state oil marketing companies face higher import bills. Higher diesel prices directly increase logistics and freight charges for agricultural produce. As a result, prices for vegetables, fruits, and staple grains rise in local retail markets across Indian cities. Increased expenses for students studying abroad Indian families sending students overseas face immediate cost increases when the rupee depreciates. University tuition fees, foreign university accommodation, and daily living costs are billed in foreign currencies like US Dollars, British Pounds, or Euros. Families must convert more rupees to settle the same foreign currency fees. Higher exchange rates also increase the required loan amount for students taking foreign education loans from Indian banks
Connection between rupee depreciation inflation: Rupee depreciation against the dollar makes imports more expensive in rupee terms and causes prices to rise.The worst hit are working people. The recent multiple increases in fuel and energy prices by the union govt have hurt the people in general and the poor in particular very badly. -Professor of Economics, Bharathidasan University, Venkatesh Athreya How is currency value determined?