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On Monday, the first trading day of the week, the Indian currency rupee once again registered a big fall. As soon as the market started, it broke 28 paise against the dollar and reached below the level of 78 for the first time. Rupee opened at 78.11 level.
Rupee was at this level on Friday
In the last trading session of the last week, the rupee had closed at 77.83 against the US dollar. The effect of the ever-increasing crude oil prices at the international level is also clearly visible on the rupee. Let us tell here that the weakness of the rupee has a direct effect on the economy of the country and the common man. Significantly, experts have predicted that it can slip to the level of 81.
Experts expressed this estimate
Amid the continuing fall in the rupee, a report quoted experts as saying that the rupee may hit an all-time low of 81 against the dollar in the coming days. That is, a further decline can be registered in it. However, in the meantime, he has expressed the possibility that after breaking this level, it is possible for the rupee to rise again. Significantly, due to the breakdown of the rupee, a big impact is seen in many sectors. This will see an increase in the prices of everyday commodities from oil prices.
Effect of sell-off of foreign investors
Experts say that when there is turmoil in the international markets, investors turn towards the dollar. When the demand for the dollar increases, then the pressure on other currencies increases. Talking about the uncertainty around the world, due to the Corona epidemic and the ongoing war in Russia-Ukraine, there has been a supply interruption, which is going to create chaos around the world. People look for safe havens when there are times of uncertainty and the dollar is considered a safe haven. Selling by foreign investors affects the foreign exchange reserves and increases the demand for the dollar, while the demand for the rupee decreases.
Major impact of weakness in rupee
Significantly, India is dependent on imports from other countries for gadgets including mobile-laptops along with essential electric goods and machinery. Most mobiles and gadgets are imported from China and other East Asian cities and most of the business is done in dollars. If the rupee continues to depreciate like this, imports will become costlier in the country. Due to imports from abroad, their prices are sure to increase, which means inflation on mobiles and other gadgets will increase and you will have to spend more. Also, let us tell you that India buys 80 percent of its crude oil from abroad. It is also paid in dollars and due to the cost of dollars, the rupee will cost more. Due to this, freight will be expensive, due to its effect, inflation will be hit further on everything needed.
