The Indian currency rupee is making a new record of falling continuously. In the past, it had slipped to the level of 81 against the US dollar, so now touching the new low level (Rupee Record Low) has crossed 82. In early trading on Friday, it weakened to a level of 82.33. Let us tell here that this fall in the rupee is going to affect you in many ways.
16 paise broke and touched record low level
First, let’s talk about the continuous fall in the rupee, then the rupee had closed at 81.88 against the dollar in the currency market on the last trading day. In the last few days, there was a slight increase and sometimes a fall in it. But in many reports, it was feared to fall to 82.
As soon as trading started on Friday, there was a strong fall of 16 paise in the Indian currency and the rupee slipped to a record low of 82.33 against the US dollar. For the first time on 23 September 2022, it touched a low of Rs 81. Whereas before that on July 20, it had crossed the level of Rs 80. Let us tell here that the rupee was at a level of 74.54 against the US dollar a year ago.
Major reasons for depreciation of rupee
There is not one but many reasons for the continuous fall in the Indian currency rupee. However, the biggest reason for its breakdown is believed to be the increase in interest rates by the US Federal Reserve. In fact, inflation in America has remained at a four-decade high and due to this, interest rates have been rising continuously (US Rate Hike). In the past, once again the Fed Reserve increased them by a huge 0.75 percent.
Currencies around the world are falling sharply against the dollar due to signs of no slowdown in rate hikes. Because when the dollar strengthens, investors are withdrawing money from the markets around the world and are putting their investments in the US dollar for security. This selling of investors is affecting the currencies around the world including the rupee. Apart from this, the Russian-Ukraine war and the geo-political situation arising out of it have also worked to increase the pressure on the rupee.
Dollar becoming a safe haven!
According to experts, when there is turmoil in the international markets, then investors turn towards the dollar. When the demand for dollars increases, then the pressure on other currencies goes on increasing. Talking about the uncertainty around the world, whether the Corona epidemic or the war in Russia-Ukraine, due to these there has been a supply interruption, which has proved to be causing chaos all over the world.
“When there are times of uncertainty, people look for safe havens and consider the dollar as a safe haven,” he said. When foreign investors sell strongly, then the foreign exchange reserves are affected and the demand for the dollar increases, while the demand for other currencies including the rupee decreases.
That’s why big trouble for India
Due to the breakdown of rupee, a big impact is seen in many areas. In this, from the price of oil to the prices of everyday commodities, an increase is visible. For India, the fall in rupee against the dollar is also a cause of big trouble because India imports large quantities of many medicines including essential oil, electric goods and machinery. If the rupee continues to depreciate like this, imports will become more expensive and you will have to spend more.
Significantly, India is dependent on imports from other countries for gadgets including mobile-laptops along with essential electric goods and machinery. Most mobiles and gadgets are imported from China and other East Asian cities and most of the business is done in dollars only. Due to imports from abroad, their prices are sure to increase, which means inflation on mobiles and other gadgets will increase. Let us tell you that India buys 80 percent of its crude oil from abroad and it is also paid in dollars only. Now the rupee will have to be spent more due to the dollar becoming expensive, due to which the freight will be expensive and its effect will be visible in the form of inflation on everything needed.
Traveling and teaching children abroad is expensive
Actually, the prices of crude oil, gold and other metals are fixed in dollars in the international market. In such a situation, due to the deteriorating condition of the rupee, we will have to spend more foreign exchange to buy them. Petrol and diesel prices will also increase in the domestic market. Apart from this, due to the fall in the rupee, it will become expensive for Indians to study and travel abroad. Due to this big fall in the domestic currency, now for the same education abroad, about 15 to 20 percent more will have to be spent than before.