Rupee is getting weaker. Has reached its lowest level ever. The rupee fell by 47 paise on Tuesday. On Tuesday, the price of one dollar had come down to Rs 88.74. The rupee also declined on Wednesday. Now the price of one dollar has become approximately Rs 89.
When the market opened on Wednesday, the rupee was strong. However, it weakened after some time. It had reached 88.82. However, later it strengthened slightly and closed at Rs 88.71. That is, on Wednesday the price of 1 dollar had become Rs 88.71, which was Rs 88.74 on Tuesday.
Whether the rupee is weakening or strengthening is determined by comparing it with the US dollar. The lower the value of the rupee against a dollar, the stronger the rupee. The higher the value of the rupee against one dollar, the weaker the rupee.
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Why did the rupee start weakening?
There are many reasons for the weakening of the currency. It depends on many factors. For example, the rupee also weakens due to selling by foreign investors in the stock market.
Foreign investors are withdrawing money from the Indian market. In just three days of this week, foreign investors have sold shares worth about Rs 9 thousand crores. Foreign investors had sold shares worth more than Rs 2,910 crore on Monday and more than Rs 3,551 crore on Tuesday. There was a sale of Rs 2,425 crore on Wednesday. Due to this the rupee weakens and the dollar strengthens.
A major reason for the fall in the rupee is the US government’s increase in H-1B visa fees. The US government will now charge a fee of $1 lakh for H-1B visa. This has had a direct impact on IT services.
Anuj Choudhary, an analyst associated with Sharekhan, told news agency PTI, ‘The rupee is likely to weaken further due to increase in US visa fees. The rupee may weaken further due to the fall in the stock market and selling by foreign investors. He says that this week the value of rupee against one dollar may remain between 88.40 to 89.25.
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After all, how weak has the rupee become?
If the value of any currency is less compared to the dollar then it is called currency breakdown or weakening. In the language of economics it is called ‘currency depreciation’. This whole game is driven by the international market.
Actually, what happens is that every country has foreign exchange reserves. Since 90 percent of trade worldwide is done in US dollars, the dollar is the largest in foreign exchange reserves. It is very important to have dollars in foreign exchange reserves, so that the rupee can strengthen.
The rupee has weakened significantly in the last one year. The rupee has weakened by more than 6 percent against the dollar in just one year. Last year on September 23, the price of one dollar was Rs 83.51. By September 23 this year, it has increased to Rs 88.74.
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How much did the rupee fall in which government?
Before becoming the Prime Minister in 2014, PM Narendra Modi used to continuously target the then Congress government over the falling value of the rupee.
Modi had said in a speech in 2013 that due to the speed with which the value of the rupee is falling, sometimes it seems that there is a competition going on between the Delhi government and the rupee as to who will fall how fast. Then he had said that at the time of independence, one rupee was equal to one dollar. When Atal ji formed the government, the price reached Rs 42 and when he left it, it reached Rs 44 but in this government it has reached Rs 60.
However, if seen, the value of rupee has decreased more rapidly under Modi government as compared to Manmohan Singh government. RBI data shows that when Manmohan Singh became Prime Minister in May 2004, the price of 1 dollar was Rs 45.45. When Narendra Modi became Prime Minister in May 2014, it reached 58.58. Now the price of one dollar has reached approximately Rs 89.
If we compare the two governments, the value of the rupee against the dollar had decreased by 29% during the Manmohan Singh government. At the same time, under Modi government it has reduced till now by 52%.
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There was never much difference between dollar and rupee.
Now when we are talking about dollar and rupee, let us also take a look at a little history. At the time of independence in 1947, the value of one dollar was Rs 4.76. The rupee remained stable till 1965 but started declining from 1966 onwards. By 1975 the value of the dollar crossed Rs 8 and by 1985 it crossed Rs 12. Economic liberalization in 1991 further weakened the rupee. By January 2001, the value of the dollar crossed Rs 46. The price remained approximately the same till 2010.
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