BitcoinWorld Euro to INR: Why the Indian Rupee is Falling Against the Euro As of September 25, 2025 , the exchange rate for one Euro (EUR) is approximately 104.215 Indian Rupees (INR) . The value of the INR has been steadily falling against the EUR , a trend that reflects a complex interplay of global economic conditions, domestic Indian policies, and broader geopolitical events. This depreciation, while a concern for importers and Indian citizens living in the Eurozone, is a natural outcome of several key factors influencing the supply and demand for both currencies. Why is the Indian Rupee (INR) Continually Falling Against the Euro (EUR)? The depreciation of the Indian Rupee is not a result of a single issue but a combination of long-term structural challenges and immediate market pressures. Understanding these factors is crucial for anyone monitoring the EUR to INR exchange rate. India’s Trade Deficit: A primary driver of the INR’s weakness is India’s persistent trade deficit, particularly its high reliance on imports. A significant portion of this is attributed to crude oil, which requires India to spend substantial amounts of foreign currency. When imports exceed exports, the demand for foreign currency (like the EUR ) increases, putting downward pressure on the Rupee . Foreign Capital Outflows: The INR is highly sensitive to the flow of foreign funds. In 2025 , persistent outflows of foreign institutional investments (FII) from the Indian market, often in response to global uncertainties or more attractive opportunities elsewhere, have reduced the demand for the Rupee and contributed to its depreciation. Monetary Policy Differences: The monetary policies of the Reserve Bank of India (RBI) and the European Central Bank (ECB) play a crucial role. Differences in interest rates and approaches to managing inflation and money supply can make one currency more appealing to investors than the other. Global Economic Headwinds: Broader global factors, such as geopolitical tensions and shifts in global trade policies, can severely impact investor sentiment. For example, the imposition of new tariffs by countries like the U.S. has raised concerns for India’s economy and has been a major contributor to capital outflows and Rupee weakness. Domestic Inflation: If inflation is higher in India than in the Eurozone, the purchasing power of the Rupee erodes faster. This makes goods and services in India relatively more expensive compared to those in the Eurozone, leading to a depreciation of the INR in the long run. What is the Impact of a Weaker Indian Rupee? A depreciating Indian Rupee has a dual impact on the economy, creating both challenges and opportunities. Challenges: A weaker INR makes essential imports, such as crude oil and electronics, more expensive. This can lead to cost-push inflation , raising the prices of consumer goods and services. For Indian students studying in Europe or families with loved ones there, it also increases the cost of remittances and tuition fees. Opportunities: On the flip side, a weaker Rupee makes Indian exports more competitive in the global market. Indian goods and services become cheaper for European buyers, which can help improve the country’s trade balance and boost export-oriented sectors like textiles, software services, and manufacturing. Why is the INR falling against the USD as well as the EUR? The INR has been under pressure against multiple major currencies, including both the USD and the EUR . This widespread depreciation is primarily due to global factors that are influencing all emerging market currencies. A strengthening U.S. dollar, driven by factors like interest rate expectations, has led to capital moving out of emerging markets and into U.S. assets. This creates a domino effect, weakening currencies like the INR not only against the USD but also against other major currencies like the EUR . How does the Reserve Bank of India (RBI) manage the INR’s value? The Reserve Bank of India (RBI) intervenes in the foreign exchange market to manage the INR’s value and prevent excessive volatility. The RBI does not target a specific exchange rate but aims to ensure orderly market conditions. It achieves this by buying or selling foreign currency reserves, like the U.S. dollar , to either strengthen or weaken the Rupee as needed. However, its interventions are often limited to smoothing out sharp moves and do not typically reverse long-term trends. Does a falling INR always indicate a weak Indian economy? No, a falling INR does not always indicate a weak Indian economy. While depreciation can reflect certain challenges like trade deficits or capital outflows, it can also be a healthy adjustment that makes a country’s exports more competitive. In fact, many economists argue that a certain level of depreciation is necessary for an export-driven economy. Therefore, the value of the Rupee is just one of many indicators, and it must be considered alongside other economic data points, such as GDP growth , inflation, and fiscal policies. Conclusion The current exchange rate of the Euro to INR and the ongoing depreciation of the Indian Rupee are the result of powerful economic forces. While short-term volatility is always present, the long-term trend is driven by fundamental factors like India’s trade balance, foreign investment flows, and the relative monetary policies of the RBI and ECB . As the global economy continues to navigate geopolitical and trade uncertainties, the INR’s value will remain a key indicator of India’s economic health and its ability to manage these external pressures. This post Euro to INR: Why the Indian Rupee is Falling Against the Euro first appeared on BitcoinWorld .
