The Indian rupee fell 84 paise or 1.05 percent to close at 85.61 against the US dollar on Thursday amid growing tension between India and Pakistan.
Today the decline in the rupee is the biggest one -day decline in the last two years. Earlier, the rupee saw a decline of 105 paise in a day on March 7, 2023, after which today’s decline is the biggest. In addition to increasing geopolitical stress, the strength in the dollar index and rising crude oil prices also contributed to the devaluation of the rupee. On Thursday, the rupee opened at 84.61 in the Interbank Forex Exchange Market and then the highest level of 84.52 and the minimum level of 85.77 in Intrade. After this, the rupee fell 84 paise to close at 85.61 at the end of the business, while the last time it closed at 84.77. On Wednesday, the rupee fell 42 paise to close at 84.77 against the US dollar. Thus, in just two days, the rupee has fallen by a total of 126 paise.
According to the traders, after reaching the rupee 85.49, the RBI intervened by selling dollars. If this had not been done, the rupee could have dropped even more. According to foreign exchange traders, Pakistan today tried to attack several military bases in northern and western India, but when the news spread that India had neutralized Pakistan’s defense system to thwart the attack, investors felt that they should not take risks by investing in the local market. This led to a decline in the stock market and also devalued the rupee. Meanwhile, the dollar index measuring the dollar strength against six major currencies rose 0.46 percent to 100.07 today. Thus the dollar saw an increase for the second consecutive day and the dollar index has again reached above 100. Brent crude also saw a similar boom for the second consecutive day and was seen trading at 61.76 per barrel with a 1.05 per cent gain.
