Dollar vs Rupee: Rupee is breathless in the war of West Asia, it broke against the dollar and reached a record low of 94.93, how much more will it fall now?
Dollar vs Rupee: Amid the ongoing war in West Asia and rising crude oil prices, the Indian Rupee has fallen significantly on Friday and reached its lowest ever level of 94.93 per dollar at the time of writing the news. The rupee opened at 94.18 in the interbank foreign exchange market, but after being under pressure throughout the day, it fell further and closed at a record level. Earlier it had fallen to the level of 93.96, which was the lowest level at that time.
Read :- A report of HDFC Mutual Fund amid the market decline, told that investors should remain invested in equity.
The main opposition party Congress Party has targeted the central government over this historic fall in the rupee. Congress shared an old video of Prime Minister Narendra Modi, raising questions on the current situation and criticizing the economic policies of the government.
The party says that the weakness of the rupee raises questions on the country’s economic condition and policy management. At the same time, in such cases, the government usually cites global reasons like rise in crude oil prices, strengthening of the dollar and geopolitical tension as the main reasons.
Record fall in rupee
The main reasons for this decline are believed to be the continuous selling by Foreign Institutional Investors, the strengthening of the dollar and the ongoing geopolitical tension in West Asia. The strengthening of the dollar globally is also putting pressure on the rupee, where the dollar index remains in the lead against six major currencies.
Read :- Record fall in rupee against dollar, fell by 41 paise to 93.94
The effect of this instability was clearly visible in the domestic stock markets also. BSE Sensex closed at 73,583, falling more than 1,690 points or 2.2 percent, while Nifty 50 also recorded a decline of about 487 points. This weakness in the market was seen due to withdrawal of foreign investors and global uncertainty. Due to heavy selling, investors lost about Rs 8.5 lakh crore.
stock market crash
At the same time, the prices of Brent Crude Oil in the international market have increased to around $ 109.8 per barrel, which is putting additional pressure on import-dependent countries like India. High crude oil prices not only increase inflation but also have a negative impact on the current account deficit and currency.
It is noteworthy that whenever the Indian Rupee weakens, it has a direct impact on inflation. Imported goods become expensive, especially crude oil, due to which the prices of petrol, diesel and everyday items may increase. This also increases the fiscal deficit of the government, as there is pressure on both subsidies and import bills. Furthermore, expenses increase for students studying abroad, as they have to pay more in dollars.
However, there is a positive side to the rupee’s decline. This benefits the exporters as they get paid in US Dollars and due to the weak rupee they get more rupees. This can give a boost to export-based sectors like IT, pharma and textile. That is, until the tension in West Asia does not subside and crude oil prices stabilize, the rupee is expected to remain under pressure.
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