Indian rupee has hit the dreaded 80-mark and settled at 80.05 against US dollar in early trade on Tuesday. The rupee settled at 79.98 on Monday, registering a fall of 15 paise over its previous close.
Research Analyst at Sharekhan by BNP Paribas told news agency PTI, “Indian rupee, opened in the green on strength in domestic equity markets and a weak US dollar. However, rupee weakened in the latter half of the day on surge in crude oil prices and selling pressure by FIIs. FII outflows rose to Rs 1,649 crore on Friday.”
Reacting to the fall in domestic currency over the past couple of days, Kotak Mahindra Bank CEO Uday Kotak said that US Dollar is the “most sought after asset in the world today”.
Kotak tweeted, “Central bankers globally move in a herd led by ring master the US Fed. Whether easy or tight money. Go out of line your currency is crushed. Look at Japan, a 30 plus percent depreciation. That’s the power of the US Dollar the most sought after asset in the world today. How long?”
RPG Enterprises chairman Harsh Goenka shared a graph indicating an annual rise in India’s exports from $151.75 billion in April-June 2021 to $189.93 billion in April-June 2022 and wrote, “And that’s the big advantage of a falling Rupee”
Mahindra Group boss Anand Mahindra also said the ‘mighty’ dollar has gotten mightier. Mahindra wrote, “The ‘mighty’ dollar has gotten mightier. Despite perceptions of the decline of American influence globally, the dollar is still the currency of safety… We seem to be only in the middle of the list of depreciated currencies”
Meanwhile, Finance Minister Nirmala Sitharaman informed the Parliament in a written reply that the value of the rupee went down from 63.33 against a dollar on December 31, 2014 to 79.41 on July 11, 2022. She further noted that foreign portfolio investors have withdrawn about $14 billion from Indian equity markets in 2022-23 markets so far. Sitharaman attributed the fall in rupee to unrelenting foreign fund outflows, Russia-Ukraine war and soaring crude oil prices. She added, “Currencies such as the British pound, the Japanese yen and the Euro have weakened more than the Indian rupee against the US dollar and therefore, the Indian rupee has strengthened against these currencies in 2022.”
She further said, “The depreciation also impacts the imports by making them more costly. The Reserve Bank of India (RBI) regularly monitors the foreign exchange market and intervenes in situations of excess volatility. The Reserve Bank of India has raised interest rates in recent months that increase the attractiveness of holding Indian rupees for residents and non-residents.”
Author: Naveen singh kushwaha
