Rupee hits 80 per dollar-mark for first time, Here's how it will impact you
The Union government revealed in Parliament on Monday that the Indian rupee's value versus the dollar had decreased by Rs 16.08 (25.39%) in the previous eight years. According to the finance ministry, the exchange rate in 2014 was Rs 63.33 to a dollar, according to the Reserve Bank of India (RBI).
For the second day in a row, the Indian rupee fell to a record low of 80 per US dollar in early trade on Tuesday, July 19, according to news agency ANI. It surpassed the 80-per-dollar milestone on Monday, but recovered somewhat to close just below 80 at 79.97.
The Union government revealed in Parliament on Monday that the Indian rupee's value versus the dollar had decreased by Rs 16.08 (25.39%) in the previous eight years. According to the finance ministry, the exchange rate in 2014 was Rs 63.33 to a dollar, according to the Reserve Bank of India (RBI). It had decreased to Rs 79.41 per dollar on July 11, 2022.
Capital outflows have been a big source of concern for the Indian rupee, with capital markets revealing that foreign investors sold shares worth Rs 1,650 crore. Over the last two weeks, the rupee has fallen to new lows practically every other day. However, the initial gains on Monday, fueled by optimism that the Reserve Bank of India would intervene to strengthen the native currency, were short-lived, as the rupee dropped to a new low of Rs 79.41 per dollar.
The rupee has plummeted since the beginning of the year, down 7.6 per cent so far. The fall of the Indian rupee resulted in benefits for the US dollar. In reality, the dollar has enjoyed a fantastic run, rising about 8% since the beginning of the year.
The RBI's unexpected rate hike last month did not stem rupee depreciation, as a widening current account deficit emerged after the country's June trade deficit reached a record high. Along with the Russia-Ukraine conflict, rising global crude oil prices and surging inflation have exacerbated global economic woes as central banks struggle to keep their currencies from falling against the US dollar. The outflow of foreign portfolio money is another important factor for the rupee's devaluation. So far in 2022-23, foreign portfolio investors (FPIs) have withdrew around $14 billion from Indian equities markets.
Crude oil, coal, plastic material, chemicals, electronic products, vegetable oil, fertiliser, equipment, gold, pearls, precious and semi-precious stones, and iron and steel are among the items imported by India. However, a fall in the value of the rupee would make exports cheaper. This may have an impact on household spending decisions since certain items may become more expensive. Furthermore, students planning to study abroad during this period will face an increase in tuition. Remittances (the money that people living abroad send to their family in India) would be more expensive since they would be sending more rupees.