Trump Tantrum impact on the Indian rupee expected to be temporary

Trump Tantrum impact on the Indian rupee expected to be temporary
/ Unsplash - Ishant Mishra
By bno - Mumbai bureau January 16, 2025

The "Trump Tantrum," a term describing the impact of Donald Trump's presidency on the Indian rupee, is expected to be temporary, news agency ANI reported on January 14 citing a State Bank of India (SBI) report. The report forecasts that while the rupee may face initial fluctuations, it is likely to stabilise in the near future.

ANI reported that historical trends suggest the Indian currency has typically performed better under Republican administrations than Democratic ones. The analysis also pointed out that past US presidencies, particularly since the Nixon era, have seen a relatively stable rupee during Republican leadership.

The rupee has weakened since mid-2024, driven by capital outflows and a stronger US dollar following Trump's election. Since November, the rupee has fallen by around 3% against the dollar. However, its performance remains among the most stable globally, according to the SBI report.

The report further indicated that capital inflows linked to the inclusion of Indian bonds in global indices helped maintain stability in the domestic foreign exchange market during the first half of 2024. ANI added that the rupee is expected to recover from initial shocks and stabilise in the months ahead, easing fears of prolonged instability.

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