The rupee is likely to lag most of its Asian peers in a softer dollar environment, analysts say, with the Indian currency weighed down by an imbalance between what the country owes and owns abroad. While currencies such as the Singapore dollar, Korean won and Taiwan dollar have surged 6% to 9.5% this year, the rupee is nearly flat. Get the latest news from India and how it matters to the world with the Reuters India File newsletter. Sign up here. Analysts at Barclays, Jefferies, and ANZ attribute the divergence to differences in the net international investment positions (NIIP) with Asian economies. Advertisement · Scroll to continue
Report This Ad NIIP is the gap between what a country owns overseas and what it owes to the rest of the world. As of December 2024, India had a negative NIIP, owing about $350 billion more to the world than it owned in foreign assets. In contrast, most other Asian countries hold a positive NIIP, meaning their ownership of foreign assets exceeds their external liabilities. Unlike Taiwan, South Korea, China and Hong Kong, the absence of a positive NIIP for India implies underperformance of the rupee, said Mitul Kotecha, head of FX and EM macro strategy, Asia, at Barclays.
