The Indian rupee (INR) depreciated by 0.5 percent on month vis-vis the US dollar in April 2024 as most EMEs registered pressures from strengthening of the US dollar amidst heightened geopolitical tensions and waning rate cut expectations, according to RBI Bulletin. The INR remained one of the least volatile among major currencies during the month. In terms of the 40-currency real effective exchange rate (REER), the INR depreciated by 1.1 per cent (m-o-m) in April 2024 as negative relative price differentials more than offset the appreciation of the INR in nominal effective terms. The US dollar index strengthened on the back of restrictive US monetary policy and trimmed probability of rate cuts by the Fed but recorded moderation in first half of May post the release of softer US inflation print and consumer spending data. The MSCI currency index for EMEs mirrored the greenbacks movement in April, exacerbated by capital outflows, especially in the equity segment.
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