Today i.e. on January 13, the rupee has reached its record low. A decline of 27 paise has been seen in the rupee against the US dollar. As a result, the rupee has reached an all-time low of Rs 86.31 per dollar. Today the dollar opened at Rs 86.12, after which this decline was seen. Earlier on January 10, the rupee had closed at 86.04 against the dollar.
According to experts, the reason for this fall in the rupee is the recent selling done by foreign investors in the Indian stock market. Apart from this, geopolitical tension has also had a negative impact on the rupee.
What is rupee breakdown?
The fall in the value of rupee means that it will become more expensive for India to import goods. Apart from this, traveling and studying abroad has also become expensive. Suppose when the value of rupee was 50 against the dollar, Indian students in America used to get 1 dollar for 50 rupees. But students will now have to spend Rs 86.31 for 1 dollar. As a result, studying, traveling and living abroad will become more expensive for Indians.
If we look at the recent fall, on Friday, the last trading day of last week, the rupee fell by 18 paise and closed at 86.04 per dollar. Whereas last day also it had closed at 85.86 against the dollar. Devaluation of any country’s currency adversely affects not only the government but also the general public.
Why does the rupee fall?
There are many reasons for the weakening of the rupee. The biggest hand could be considered the continued selling by foreign investors along with the possibility of policy rate cut by the US Federal Reserve. Due to which not only increased pressure on the market but also affected the rupee. The special thing is that due to the strengthening of the dollar, foreign investors are withdrawing money from markets around the world and investing in American markets. Talking about India, sales have increased in the markets here. Its effect is clearly visible in the form of devaluation of the rupee.
danger of rising inflation
As mentioned here earlier, when the rupee depreciates, imports become more expensive. This clearly means that the government will have to spend more money to buy goods from abroad. For example, if we look at the rise in crude oil prices, India currently imports most of its crude oil requirement (about 80%), when the rupee weakens against the US dollar, the crude oil import bill increases. And the government has to pay more. Its effect will be that the prices of petrol and diesel may increase. If prices increase, it affects the common people in the form of inflation.
