The Indian rupee remained stable for many years on the strength of the Indian economy. The pressure on the Indian rupee is not due to widening current and trade deficits and foreign investors dumping their capital market assets but also due to the aggressive rate hike stance of the U.S. Federal Reserve. The Indian rupee has depreciated nearly 12 percent against the dollar in 2022.
Unlike Pakistani exporters that manage to keep their export proceeds outside the country and bring it at opportune time the Reserve Bank of India allows Indian exporters to keep their dollars parked in the Exchange Earners Foreign Currency (EEFC) account and to keep their overseas earnings in that account for up to a month. The exports convert only when the USD/INR rate moves up. The RBI has stopped protecting Indian rupee and it is trading in the range of Rs.83-Rs.84.50.