In its March bulletin, RBI noted that the Indian rupee (INR) depreciated by 0.9 per cent (m-o-m) during February 2025, weighed by heavy FPI outflows. The extent of depreciation of the INR, however, was lower than the previous month. In addition, the INR remained one of the least volatile major currency. As on March 7, 2025, India held foreign exchange reserves worth US$ 654.0 billion, sufficient for over 11 months of imports and 91 per cent of external debt outstanding at end-September 2024. The top reserves-holding economies witnessed drawdown in forex reserves during Q3:2024-25, with some signs of recovery in 2025. The central bank also said that as of March 17, 2025, the US dollar has given up all of its gains since mid-November 2024, weighed by US trade policy and growth uncertainties. Potential negative impact of trade restrictions on US growth weighed on the US dollar and the US dollar index (DXY) weakened by 0.7 per cent in February and continued to weaken in March. Concomitantly, the MSCI currency index for EMEs increased marginally despite modest capital outflows.