INR vs USD: Why a stronger dollar doesn’t mean the rupee fell by the same percentage, explains Samir Arora

Samir Arora, expert fund manager and market veteran, has stepped in to clarify a widespread misconception about how to correctly calculate depreciation of the Indian Rupee (INR) versus the appreciation of the US Dollar (USD). His explanation comes at a time when the rupee is under intense pressure, having slumped to fresh record lows against the dollar amid trade tensions with the United States.

Arora, founder and fund manager at Helios Capital, used social media to explain that headlines often state the dollar has appreciated by a certain percentage against the rupee, but that does not mean the rupee has depreciated by the same percentage. The difference arises from how currency values are quoted and how depreciation should actually be measured.

“If INR goes from USD 1 = 61 to USD 1 = 88, the dollar has appreciated by 44%. That does not mean the rupee has depreciated by 44%. In fact, the rupee has depreciated by 30.6% with these numbers,” Arora wrote on X. “Not good in any case, but I am talking arithmetic.”

To make it easier to understand, he gave a round-number illustration. If the exchange rate weakens from ₹50 per dollar to ₹100 per dollar, the dollar’s value appears to have doubled — a 100% appreciation. But for someone holding ₹100, the picture looks very different. Earlier, that ₹100 would fetch $2, while now it buys only $1. In other words, the rupee’s purchasing power in dollar terms has halved — a 50% depreciation, not 100%.

Arora stressed that looking at it from the perspective of rupee holders provides a clearer picture for investors and ordinary citizens. While the optics of “USD appreciating by 100%” may sound alarming, the actual hit to rupee value is different and must be measured correctly.

His clarification was in response to wealth expert Akshat Shrivastava, who had earlier posted about the rupee’s decline. Shrivastava noted that ten years ago, the rupee was at 61 to the dollar and is now close to 88 — calling it a 44% drop compared to the USD. He posed the broader question of why currencies lose value at all.

Shrivastava explained that the demand-supply balance of a currency determines its level. Supply is controlled by the government, which decides how much to print. Printing too much currency risks fueling inflation and eroding value. Demand, however, is market-driven — determined by trade flows, investment, and confidence in the economy. When demand weakens relative to supply, the currency falls.

Arora’s point complements this, underlining that rupee depreciation should be assessed from how many fewer dollars one can buy with the same rupee, rather than simply mirroring the dollar’s percentage appreciation.

The timing of the debate is significant. The Indian rupee dropped 0.4% to 87.9763 per dollar this week, breaching its previous all-time low of 87.9563 touched in February. With this decline, the rupee has become Asia’s worst-performing currency in 2025, battered by persistent foreign outflows and external shocks.

The immediate trigger has been Washington’s imposition of 50% reciprocal tariffs on Indian exports, targeting labor-intensive industries such as textiles, footwear, and jewelry. These sectors form a large share of India’s shipments to the US, and analysts fear a steep decline in orders. Citigroup Inc. estimates the tariffs could shave 0.6–0.8 percentage points off India’s annual GDP growth, a meaningful drag on the economy.

Adding fuel to the sentiment, US Treasury Secretary Scott Bessent made dismissive remarks about the rupee’s international prospects. In an interview with Fox News, he quipped: “There are a lot of things I worry about. The rupee becoming a reserve currency is not one of them.”

Bessent emphasized that the rupee is near an “all-time low,” underscoring the dollar’s dominance in global trade. His comments followed the Trump administration’s tariff escalation, which many see as a direct challenge to India’s trade competitiveness. The steep levies will make Indian products significantly more expensive for American consumers, hurting exporters already struggling with margin pressures.

The double blow of tariff pressures and currency weakness has revived debate on India’s external vulnerabilities. For investors, Arora’s clarification may not soften the immediate market pain, but it highlights the importance of interpreting numbers correctly. Currency moves influence everything from inflation expectations to foreign investment flows, and exaggerating depreciation can distort the narrative.

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