Indian Rupee: Crude oil crossed 85 dollars, Indian Rupee is trembling due to US-Iran tension.

Indian Rupee Falling Fast: This has become a matter of very deep and serious concern for the Indian markets. The impact of the increasing geopolitical tension between America and Iran is now directly visible on India’s wallet and economy. Crude oil prices are skyrocketing which is having a negative impact on our currency. In Thursday’s early trade, the Indian Rupee opened at a very low level of 96.2475 against the Dollar, which is a big alarm bell for the economy.

This level has reached very close to its lowest level of 96.96 made in May, due to which there is a lot of panic among the investors. So far this month, a huge decline of about 1.7% has been recorded in the rupee, which is challenging the economic stability of the country. There is a lot of turmoil in the foreign exchange market because there is a strong possibility of increase in the prices of imported goods. If this situation continues continuously then a new and bigger phase of inflation may begin in India which will trouble the common man.

Rise in crude oil prices

The biggest reason for this continuous weakness of the rupee is the rising prices of crude oil in the global market. After increasing tension between America and Iran, Brent crude has reached above $ 85 per barrel in the international market. The fear is that if the situation worsens, the oil supply from Hormuz may be completely affected. A large part of the world sends oil through this important sea route, so there is a danger of supply disruption.

heavy dependence on oil imports

India is among the major countries of the world which are highly dependent on other countries for their energy needs. Our economy buys more than 85% of its crude oil needs from external and foreign markets, hence the demand is always high. As soon as oil becomes expensive, the demand for US dollars suddenly increases in the international market. For this reason, the Indian rupee starts depreciating rapidly against the dollar and our import bill becomes huge.

Tension and panic in the market

On Wednesday, America suddenly launched a major and massive attack on Iran’s coastal defense and various missile bases. Immediately after this, Iran has given a very strict warning to reduce its energy exports even further. In such a situation, the whole world is deeply afraid that the oil supply may be adversely affected in the future. Due to this nervousness, investors have increasingly turned towards the US dollar which is considered safe.

Reserve Bank’s efforts ineffective

A few weeks ago, when crude oil became a little cheaper in the international market, the Reserve Bank had taken several important steps. The bank had made efforts to increase the inflow of dollars in the market, which was expected to strengthen the rupee. But now oil has again become very expensive due to which the huge demand for dollars in the market has again increased rapidly. This increasing demand for dollars in the market is completely weakening and neutralizing the effect of all those previous steps of the Reserve Bank.

Also read: Raghuram Rajan will handle the weakening US economy! 3 Indians including former RBI Governor got big responsibility

direct impact on the common man

Both weak rupee and expensive oil can increase the daily expenses of common people and bring inflation. Along with petrol and diesel becoming expensive, your flight tickets can also become very expensive due to increase in cost of aviation fuel. The prices of mobiles, laptops and other essential imported goods can also skyrocket in the Indian markets, which will spoil your budget. The cost of studying abroad and traveling abroad may also increase significantly, which will cause great difficulty to students and travelers.