The stability of the Indian rupee has received praise from foreign investors and policymakers, despite ongoing geopolitical tensions. This stability is largely credited to the efforts of the Reserve Bank of India.

However, experts warn that a stable currency can result in overvaluation, which raises concerns about its true market value. To determine the fair value of the Indian rupee, the real effective exchange rate (REER) is used. The REER is calculated using a basket of 40 currencies, weighted based on trade relationships.

Current assessments suggest that the rupee may be overvalued, indicating that its stability may not accurately reflect its true value in the global market.