Today, the rupee fell for the sixth straight day and hit a new low. Rupee against dollar (Dollar vs Rupees) has slipped to the level of 79.92. At this time, most currencies are depreciating against the dollar. The US inflation rate was 9.1 percent in June, a new 41-year high. An important meeting of the Federal Reserve is going to be held in the last week of this month. It is believed that the Federal Reserve can raise interest rates by up to 100 basis points to control uncontrolled inflation. This is why the dollar is strengthening. The dollar index is currently near 108. This index shows the strength or weakness of the dollar against six major world currencies.
Market experts say that the rupee is likely to fall further. Rupee may slip to 81 level. The rupee has so far fallen by 7 percent against the dollar in 2022. Experts say the rupee has outperformed other Asian currencies against the dollar. In such a situation, further reduction is possible in the future. Sugandha Sachdeva, Head of Commodity and Currency Research at Religare Broking said this.
Investors are attracted to the dollar
Ukraine crisis is attracting investors to safer investments. The Federal Reserve is raising interest rates to bring inflation under control. This is strengthening the dollar. In such a situation, the demand for dollars is increasing. Due to the increase in demand, its strength is also increasing and other currencies are also slipping.
US bond yields are rising
Bond yields are rising due to rise in interest rates. Bonds in the US are currently yielding around 3 percent. In such a situation, investors from all over the world are investing in the American bond market. Apart from this, pressure is increasing on other currencies including rupee.
What will be the impact on the common man?
A weakening rupee has not only disadvantages but also some advantages. Good money is also available for goods going abroad from India. A weaker rupee is beneficial for those exporting goods or services from the country. Products like parts, tea, coffee, rice, spices, marine products, meat are exported from India and exporters of all these will benefit from rupee weakening.
The import bill will be expensive
A weakening rupee means that the country now has to spend more money to buy the same amount of goods. Imported goods will become more expensive. It includes gold, crude oil as these commodities are priced in dollars in the international market. Currently, crude oil prices are on the rise and the rupee is at a record low, so imports of petrol and diesel will become expensive.
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