US Treasury Secretary Scott Bessent dismissed speculations that the rupee could replace the dollar as the world’s reserve currency. Bessent was asked on Fox News about the rupee’s emergence as a strong contender to the US dollar. His remarks were sarcastic and highlighted that the rupee has fallen to an all-time low against the USD. Not just the INR, almost all leading Asian currencies have been dipping against the greenback for a month.
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“There are a lot of things I worry about. The rupee becoming the reserve currency isn’t one of them,” said Bessent in the TV interview. The rupee is “near an all-time low versus the US dollar,” he said, accurately pointing out the development. The INR had fallen to a low of 88.27 on Monday but briefly surged on Tuesday, reaching 88.11. The damage to the local currency is done, and a rollback from here looks hard.
Rupee Cannot Become Reserve Currency: Might Fall To 90-91 Range Next
Several analysts predict that the INR could also fall to the 90 to 91 level by the end of 2025. “We can expect the pressure on the rupee to persist in the coming days. However, the RBI is likely to defend the currency through its intervention. A key psychological level will be the 90/USD mark,” said Aditi Gupta, Economist at Bank of Baroda, to Money Control. Therefore, the speculations that the rupee is emerging as a reserve currency have been laid to rest.
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The latest data from TradingView shows that the INR has fallen 2.84% against the USD year-to-date. In a year alone, it has plunged 5% making it the biggest fall in the last three years for this period. With a track record this weak, there is little to no chance for the rupee to become the reserve currency. Other currencies like he euro and the pound have more chances to take the dollar’s place.