The depreciation of the Indian rupee continues due to the strengthening of the dollar. In the early trade on Monday, the rupee fell by nearly 40 points to 81.55 in the rupee. On the other hand, the US dollar has reached its highest level in 20 years. After the fall in the Indian rupee, market experts predict that the Reserve Bank may decide to sell the dollar to stop the fall in the currency.
What will be the effect of rupee depreciation on the market?
The weakening of the rupee will have the most adverse effect on the country's import bill. As the rupee is depreciating, the country's import bill is increasing. Now traders will have to spend more money to import than before. Companies dependent on imports will have lower margins. It will be recovered by increasing the value. This will further increase the already existing inflation. Due to this, petroleum products, traveling abroad, and consuming foreign services will become expensive. The depreciation of the rupee also hurts the foreign exchange reserves. This will empty the treasury of the country. This is not right from the point of view of the economic condition of the country.
How did the US currency strengthen from the rupee in the year 2022?
Date Value of One Dollar in Rupees
1 January 75.43
February 1 74.39
March 1 74.96
April 1 76.21
May 1 76.09
June 1 77.21
1 July 77.95
August 1 79.54
29 August 80.10
22 September 80.79
26 September 81.55
These industries of the country will benefit
In the event of a weakening of the rupee, the earnings of IT companies doing their business abroad will increase. At the same time, the exports of the pharma sector will also increase. Apart from this, the textile sector will also benefit from the weakening of the rupee as India currently stands second in the world in terms of the export of textiles. Therefore, if the dollar strengthens, this sector will benefit greatly.
Finance Minister said - we are in a better position than other currencies
Finance Minister Nirmala Sitharaman on Saturday said that the rupee is much stronger against the US dollar than other currencies. On the question related to the rupee falling to a record low, Sitharaman said that the Reserve Bank and the Finance Ministry are monitoring the situation very closely. He told reporters here that if there is one currency that is capable of sustaining itself and is free from volatility or volatility as compared to other currencies, it is the Indian rupee. We have come back very well. We have dealt with this situation quite well.
When asked about the depreciating rupee, he said there is a need to study the condition of other currencies against the dollar in the current period of depreciation. The rupee had touched a level of 81.09 against the US dollar on Friday. This decline has continued in the last few months.
Also Read: Rupee vs Dollar: The rupee at its all-time low, after Fed's decision reached the level of 80.45
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