The Indian Rupee has reached its all-time low. On Wednesday (6 November), the Indian Rupee fell by about 0.1141 paise against the US dollar. After the day’s trading, it closed at 84.2366 rupees per dollar.
The Indian rupee has been falling continuously by small and big depreciations since 10 October. Earlier, yesterday, i.e. on 5 October, the rupee closed at its lowest level of 84.1225 per dollar. On 10 October, the Indian currency was at 83.9685 against the dollar. On 17 October, it had come down to 84.03 against the dollar.
Reasons for the fall of The Indian Rupee
- The dollar remained strong due to the results of the US presidential election.
- Foreign investors sell off Rs 16,358 crore in Indian markets.
- The Federal Reserve is expected to cut rates later this week.
- US market Dow Jones rose by 1300 points or more than 3%.
The stock market rose by 901 points
Amidst the US Presidential election voting and results, the Sensex on Wednesday closed at 80,378 with a gain of 901 points (1.13%). Nifty also rose by 270 points (1.12%) and closed at 24,484. At the same time, BSE Smallcap closed at 56,008 with a gain of 1,077 points (1.96%).
Out of 30 Sensex stocks, 25 rose and 5 fell. Out of 50 Nifty stocks, 41 rose and 9 fell. All sectoral indices of NSE rose. The IT sector saw the highest rise of 4.05%.
The Indian Rupee Hit an intraday low of 84.31
The Indian Rupee opened at 84.23 intra-day. It kept trading between 84.15 and 84.31. On October 4, market experts had predicted that the rupee could reach the lowest level of 84.25 in the coming days.
Importing will be expensive
The fall in the value of the Indian Rupee means that import of things has become expensive for India. Apart from this, travelling and studying abroad has also become expensive. Suppose when the value of the Rupee was 50 against the Dollar, then Indian students in America could get 1 Dollar for 50 Rupees. Now students will have to spend 84.23 Rupees for 1 Dollar. This will make everything from fees to accommodation and food and other things expensive.
How is the price of a currency decided?
If the value of any currency decreases in comparison to the dollar, it is called currency falling, breaking, or weakening. Currency depreciation in English. Every country has a foreign currency reserve, through which it does international transactions. The effect of the decrease and increase in foreign reserves is seen in the value of the currency.
If the dollar in India’s foreign reserve is equal to the US rupee reserve, then the value of the rupee will remain stable. If the dollar decreases with us, the rupee will weaken, if it increases, the rupee will strengthen. This is called the floating rate system.
