Rupee jumps to a record low -breaking 80-mark against US dollar

The Indian Currency had fallen down on eight consecutive day on Tuesday. The Rupee has created a recorded 80 mark against the US Currency Dollar for the first time ever and it is the historic low for the Indian Currency 

Indian Rupee

The US Dollar has increased its rally for over a week and drifted above and reached major peers as markets reduced the percentage of  odds on Federal Reserve Rate hike earlier this month.The Indian Currency has declined over 7% since the beginning of this year 2022.  It was 78.94 on June 30 and very soon it has touched over 80 mark on July 19.in very few sessions.

If we look into the statistics of Rupee Journey since December 2014, The value of Rupee depreciated 26.27 % from 63.33 on December 31, 2014 against dollar  to 80.06 as of today (July 19 2022). In the mean time Dollar has gained wonderfully almost 8%  since the start of 2022.. 

Rising the dollar is not a positive scenario for Indian Rupee.and it has stumbled 7.72% so far right from the beginning of 2022. The Rate hike y RBI  Monetary Policy Committee (MPC) last month couldn't stop Rupee decline.     

Russia Ukraine war has created the crisis and uncertainties and  has  huge impact on most economies in the World. The Tightening of various global financial conditions and the Rise in oil prices and soaring inflation also added for the downfall of Indian Rupee over US Dollar.

Outflow of foreign Portfolio capital is the major reason for Rupee depreciation. Foreign Portfolio Investors (FPIs) have withdrawn about $14 billion from Indian equity markets in 2022-23.Monetary tightening in advanced economies like USA  makes foreign investors to withdraw funds from global markets. The US Federal Reserve has already started rising the key interest rates in order to control inflation that surged 9% last month.

The Primary impact of Rupee depreciation is on Importers as they need to spend more on quantity and price.Various Indian imports include Crude Oil, Coal, Plastic material, electronic goods, chemicals, vegetable oil, goods, gold,pearls,precious and semi precious stones, fertilizer, machinery, iron and steel. With the dip in the Rupee the above importing items are expensive. It shows impact on spending decisions of households also.

The Exports  from India will become more cheaper as they receive more Rupees in exchange for dollars.For students who want to study abroad the fee amount will be on higher note as dollar would cost more compared to Rupee. The fall in Rupee might be felt on the Tourism sector as they need to spend higher for their travel. In terms of remittances the people who are staying in abroad and want to send money to their families in India need to spend more in terms of Rupee Value.