US dollar The rupee has broken and reached the abyss. On Monday, the rupee fell 67 paise to 87.29 per dollar in early trade. The Indian rupee has declined a huge decline after the US President Donald Trump’s introduction of a trade war after signing an order to impose a fee on Canada, Mexico and China. It is worth noting that Trump of America signed an order on an order to impose strict duty on goods imported from Mexico, Canada and China on Saturday, immediately thereafter, the possibility of a trade war has been strengthened by the retaliation of the country’s North American neighbors. .
Rupee reached beyond 87 for the first time
The rupee opened at 87.00 per dollar in the Interbank Forex Exchange Market and after the initial deals fell by 67 paise to 87.29 against the dollar. The rupee closed at 86.62 against the US currency on Friday. Meanwhile, the dollar index, showing the US dollar position against six major currencies, rose by 1.30 percent to 109.77. International standard Brent crude rose 0.71 percent to $ 76.21 per barrel. According to the stock market data, foreign institutional investors (FIIs) were selling on Saturday and purely sold shares worth Rs 1,327.09 crore.
Trade war a destructive step
The currency expert says that Donald Trump has imposed a 25 percent fee on Canada and Mexico and 10 percent on China. This step is the first step towards the destructive global trade war. He said that due to the continuous withdrawal of foreign capital and the continuous demand for dollars from oil importers, the pressure on the rupee continued due to the widely firm American currency in the foreign markets.
Understand why the rupee is breaking
The price of any currency in the foreign exchange market depends on the demand and supply of currency. This is the same as the price of a goods in the market is determined. When the demand for a goods increases, while its supply remains stable, it increases the price of the product to limit the available supply. On the other hand, when the demand for a product falls while its supply remains stable, the vendors have to reduce the price of the product to attract sufficient buyers. The only difference between the commodity market and the foreign exchange market is that the foreign exchange market is traded with currencies instead of objects. At present, the demand for dollars is high in the world market. Due to this, the dollar is constantly getting stronger. The rupee is weakening due to the strengthening of the dollar. You can also call it breaking.
FPI selling increased pressure on rupee
Foreign investors are also increasing the pressure on the rupee. Foreign investors are constantly withdrawing money from the Indian market. This has put pressure on the rupee. India’s foreign exchange reserves are continuously decreasing. Global investors are moving their investment in different countries, as central banks are reorganizing their monetary policies at different levels. Apart from this, the US dollar index is constantly getting stronger. The dollar measuring dollar has increased to 109.01 against the six currencies. Yield on 10 -year -old American bonds also increased to 4.69 percent of April 2024. Its impact is also being seen on the Indian rupee. Due to this, the rupee is constantly weakening.
What will be the effect of you breaking the rupee?
The impact of the breakdown of the rupee has started to be on the Indian economy, the general public and the business world. Due to weakness in the rupee, rectanging from abroad becomes expensive. Due to this, the price of essential goods increases. That is, the burden of inflation will increase on you. For example, the importer had to pay Rs 83 for 1 dollar in October, but now we have to spend Rs 87.29. India imports crude oil on a large scale. Importing crude oil will be expensive by the dollar firmly. Due to the weakening of the rupee, foreign investors withdraw money from the stock market. Its effect is visible. Breaking money will increase the budget of traveling abroad or studying abroad.
At the same time, India’s exporters benefit from the weakening of the rupee, because their products become cheaper in the foreign market. However, it is not correct to break up overol rupee. This will increase trade deficit.
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(Tagstotranslate) Rupee falls