Rupee at All Time Low: The Indian rupee has once again made a new low record. On Tuesday, the rupee fell to 90.83 against the dollar, which is considered to be its weakest level till date. Earlier on Monday, the rupee had closed at 90.74. This decline for the second consecutive day has increased the concern of both the market and the common people.
Why is the rupee weakening against the dollar?
According to foreign exchange market experts, investors are trying to avoid risk at this time. There is confusion regarding the India-US trade agreement. Apart from this, foreign investors are continuously withdrawing money from the Indian market. The demand for dollars from importing companies has also increased significantly, due to which the pressure on the rupee has increased further.
Withdrawal of foreign investment became a major reason
For the last few weeks, foreign institutional investors have been withdrawing capital from the Indian stock and bond markets. This has had a direct impact on the rupee. When foreign investors buy dollars the demand for rupee decreases. For this reason the rupee is continuously becoming weak. Due to uncertainty in the market, investors are leaning towards safer options.
Relief may come from improvement in trade deficit
However, some economists believe that the rupee may get some relief in the coming times. India’s trade deficit has come down to around $24.53 billion in the month of November, which was $41.64 billion in October. This may reduce the nervousness of foreign investors to some extent. If the situation improves, there may be a break in the fall of the rupee.
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Weakest performance among Asian currencies
The Indian rupee became the weakest performing currency among Asian currencies on Tuesday. Last week also the rupee kept slipping and on Friday it closed at the level of 90.49. Despite better trade data, the rupee did not show much strength. Experts say that until the global situation and foreign investment situation improves, the rupee may remain under pressure.
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