Rupee drops to new record level against dollar, what will be the effect of weak rupee?
The dollar remained firm on fears of a sharp hike in rates by central banks amid rising inflation. Its effect is on the domestic currency and the pressure has increased in the rupee.
Image Credit source: PTI-File Photo
Rupee has fallen to a new record level against the dollar today. at the start of today’s business rupee against dollar There was strength in However, with a sharp fall just before the end of the day’s trading, the rupee reached record lows. The record weakness in the rupee has been seen due to the rise in the dollar. In fact, with increasing concerns about inflation, there are also increasing apprehensions that the central bank will increase interest rates sharply, due to which the dollar is gaining strength and other currencies are seeing pressure, including the rupee. A weak rupee will increase the inflation of imported goods in India and this will also increase the pressure on the Reserve Bank.
where does the rupee reach
The rupee today crossed the level of Rs 83 against the dollar for the first time. According to the provisional data received at the end of trading, the rupee today declined by 61 paise to 83.01 against the previous closing level. In the previous trading session, the rupee had declined by 10 paise to close at 82.40. At the beginning of today’s trading, the rupee improved from this level to the level of 82.32. However, there has been a sharp fall in the rupee at the end of trading. At the same time, there was an increase in the dollar index and the index rose by 0.31 percent to the level of 112.48 against the previous closing level. The pressure of this rise in the dollar has fallen on the domestic currency.
What is the effect of weak rupee
A weak rupee will increase the burden on India’s economy. Actually India is an importing country. That is, the country’s dependence on imports is more than exports, so with the weakness of the rupee, there will be an increase in the import bill. With commodity prices already staying at higher levels, a weak rupee will add to the pressure on prices. In such a situation, there is a possibility that there will be an increase in the prices of products and commodities coming from outside. However, the positive side in this is that a weak rupee will increase opportunities for exporters as their products will get cheaper in the international markets. At the same time, their earning in rupee will also increase because with weak rupee they will get more rupees for every dollar.
