In June 2025, the Indian Rupee (INR) recorded significant losses, falling to its weakest point since March. On June 16, 2025, the INR/EUR exchange rate reached a yearly low of approximately 0.01005 Euros per Rupee, reflecting a depreciation of around -10.96% for the year. Concurrently, the EUR/INR rate rose by over +12%, underscoring the weakness of the Rupee against the Euro.
Rising Oil Prices Intensify Economic Challenges
Alongside these developments, the oil price increased by about 20%. This price surge is particularly problematic for India as a major oil importer, as it significantly raises import costs for energy. A weaker Rupee exacerbates the situation by driving up the costs of imports, which can in turn be an inflationary factor and threaten economic stability.
Global Impacts on Markets and Investors
- Increased Currency Volatility: The weakness of the Indian Rupee can create uncertainties in capital flows.
- Rising Commodity Prices: Not only India, but also other commodity-dependent economies will face pressures from steep increases in oil prices.
- Inflationary Trends: Globally, higher import costs could generate additional inflationary pressure.
Investors should consider these factors in portfolio allocation in emerging markets and in relation to global trade flows and commodity markets.
In summary, the combination of a weak Indian Rupee and a strong rise in oil prices signals significant challenges for the Indian economy as well as potential risks for international investments in this region.