New Delhi: The value of the Indian Rupee against the American Dollar (US Dollar) is continuously falling, and it has now reached its all-time low. During trading in the exchange market, the Rupee crossed the ₹90 mark against one Dollar for the very first time, causing serious concern.
The Rupee's value has been under severe pressure for the past few days, and today (Tuesday), it saw a record decline in early trading. This setback is likely to have a major impact on India's economy and the pockets of the common people.
What are the main reasons for the Rupee's fall?
Several internal and global factors are responsible for the decline in the Rupee's value:
* Dollar Strengthening: Due to the aggressive interest rate hike policy being pursued by America's central bank (Federal Reserve), the global demand for the Dollar has increased. Investors are withdrawing their money from markets like India and investing in Dollar-based assets.
* Capital Outflow: Foreign Institutional Investors (FIIs) are continuously withdrawing their money from the Indian stock market. This is putting severe pressure on the Rupee.
* Increasing Trade Deficit: India is importing more than it is exporting, spending a huge amount of Dollars, especially on crude oil and gold. As a result, the demand for the Dollar is increasing, weakening the Rupee.
* Global Uncertainty: Geopolitical tensions like the Russia-Ukraine war, rising oil prices, and global inflation are also affecting the Rupee.
What is the impact on the common people?
The decline in the Rupee's value is not just a game of numbers; it directly impacts our daily lives:
1. Imports Become Expensive: Since the cost of importing items like crude oil, electronics, and gold increases, the prices of petrol, diesel, cooking oil, and electronic goods will rise.
2. Inflation: The increase in import costs leads to an increase in Inflation in the country.
3. Foreign Education and Travel: One now has to spend more Rupees for studying or traveling abroad.
4. Advantage for NRIs: Non-Resident Indians (NRIs) will find it profitable as they will receive more Rupees for the Dollars they send.
Market experts believe that the Reserve Bank of India (RBI) is likely to intervene by selling Dollars in the market using its Foreign Exchange Reserves to control this historic slump.