Business Desk – Rupee vs Dollar: The Indian rupee strengthened against the US dollar on Thursday. The price of one dollar fell to Rs 93.69 in early trade. The dollar price in the last trading session was Rs 93.94. In this way the rupee strengthened by about 25 paise.
According to Forex data, the rupee opened at 93.73 on Thursday. During trading it reached a low of 93.63 and a high of 93.88. According to the data available in the morning, the rupee had strengthened by about 0.27% against the dollar.
Rupee supported by buying from foreign investors
A major reason for the strengthening of rupee is the buying of foreign investors in the Indian stock market. According to Reuters report, on Wednesday, foreign investors invested about $ 1.34 billion in Indian shares. So far in November, the figure of foreign investment has reached about 8 billion dollars.
With increase in foreign investment the availability of dollars in the Indian market increases. This helps in strengthening the rupee.
Effect of fall in crude oil prices
The fall in crude oil prices has also become a relief for the Indian currency. India imports a large part of its needs from abroad and has to pay for it in dollars. In such a situation, due to cheap crude oil, the demand for dollar and the pressure on the import bill may reduce.
According to Reuters, the price of Brent crude has fallen from a recent high of $118 per barrel to around $92 per barrel. This has provided support to the rupee.
Rupee faces challenge due to strong dollar
On the other hand, the US dollar remains strong in the international market. After October's inflation figures in America were higher than expected, the fear of the Federal Reserve raising interest rates has increased. This has strengthened the dollar.
According to Reuters, the dollar has reached a one-month high. In such a situation, despite the support the rupee is getting from foreign investment and crude oil prices, the strength of the dollar remains a challenge for the Indian currency.
What will be the impact of strengthening rupee on common people?
Strengthening of rupee against the dollar may reduce the cost of goods imported from abroad. This may affect crude oil, electronics and other imported products. However, whether its benefits will reach the customers or not also depends on international prices, taxes and costs of the companies.
A strong rupee can also provide relief to students studying abroad and people preparing to travel abroad, because they may have to spend less rupees than before to buy dollars.