Indian Rupee: PMI resilience contrasts with weakness – Commerzbank

Commerzbank notes that India’s April PMIs (Purchasing Managers' Index) show resilient activity in both manufacturing and services despite global uncertainty and higher input costs. External demand remains firm for goods, while domestic demand drives services. However, Indian Rupee (INR) is still the weakest Asian FX performer year-to-date, even after a modest weekly gain as Oil prices softened on peace hopes.

Solid PMIs but INR lags regional peers

"The final April manufacturing PMI was revised down to 54.7 from an initial 55.9. The softer reading was driven by slower growth in new orders and output, with firms citing stronger competition and greater client risk aversion amid elevated global uncertainty."

"Nonetheless, external demand remained firm, rising to a seven-month high on solid demand from Asia, East Africa, the Middle East, and Australia. Firms also reported the strongest input cost inflation since the pandemic, reflecting higher raw material costs linked to supply chain disruptions."

"In contrast, the final April services PMI was revised up to 58.8 from 57.9 initially, vs 57.5 in March. This was the strongest reading since November 2025. Domestic demand remained robust even as external demand softened."

"Overall, the final PMI readings point to sustained resilience in both the services and manufacturing sectors. Firms across the board continued to report rising input costs amid higher global commodity prices. Nonetheless, we have not seen any significant demand destruction due to higher oil prices yet."

"INR has been the weakest-performing Asian currency this year. Year-to-date, it is down 4.9% vs the USD compared to the average for Asian currencies ex-Japan of -0.9%."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)