The rupee’s ongoing depreciation, fueled by geopolitical tensions and sustained capital outflows, keeps it trading in an undervalued zone. The real effective exchange rate (REER) fell further to 92.72 in March from 93.99 in February, the lowest level in 12 years, the Reserve Bank of India’s latest bulletin showed. REER is a weighted index that compares a country’s currency against a basket of 40 foreign currencies, adjusted for inflation. A REER close to 100 indicates that the rupee is fairly valued. In March 2025, REER stood at 101.72. Since August 2025, REER has stayed below $100, declining monthly.