Rupee Depreciation 'Good' Says Mark Mobius; Adds, ' Worst Is Over'

Rupee depreciation is less about the currency itself and more about the strengthening of the US dollar against a wide range of global currencies, renowned investor and chairman of Mobius Emerging Opportunities Funds said in an exclusive interview with Republic Business.

According to Mobius, the strengthening of the dollar is a result of the policies under the Trump administration, which have significantly boosted the American economy. However, Mobius suggested that much of this dollar strengthening has already been factored into the market. As a result, he predicts that the rupee’s depreciation may slow down, and the rate of US dollar appreciation could level off in the coming months.

Benefits of Weaker Rupee? Marks Answers

Rupee has depreciated over 2 per cent in 2024. Is the rupee depreciation all bad? No, well-known investor Mobius believes that While many view currency depreciation negatively, a weaker rupee makes Indian exports more competitive on the global market. 

This, he explained, is particularly important in light of recent discussions around US tariffs, with President Trump proposing a 10 per cent increase in tariffs for many nations. Mobius argued that a 10 per cent depreciation of the rupee would essentially neutralize the impact of the new tariffs, rendering them ineffective.

Throwing light on the rupee's trajectory going forward, Mobius suggested that the situation would likely stabilise. While the rupee may continue to experience some volatility, he believes the worst of the depreciation is likely over.

According to him, a weaker rupee could play a crucial role in boosting exports and mitigating the effects of external economic pressures, including tariffs from major economies like the United States. As global currency markets continue to evolve, India’s exporters and policymakers will likely keep a close eye on the value of the rupee and the trajectory of the US dollar’s strength in the years ahead.