On Monday, the rupee fell 21 paise to 91.29 against the US dollar amid huge fluctuations across the globe due to higher crude oil prices, stronger American currency and rising tensions in the Middle East. Forex traders said that negative sentiment in the equity market and huge withdrawal of foreign funds also put pressure on the Indian currency. If experts are to be believed, there may be more chaos in the currency market in the coming days. Experts believe that due to this war it may cross the level of 92 against the dollar. There is a reason for that too.
It is being estimated that the price of crude oil may cross the level of $100. Whose direct impact will be seen in rupees. There may also be a decline in the country’s treasury. However, at the Interbank Foreign Exchange on Monday, the rupee opened at 91.23 and fell further to 91.29 against the dollar in early deals, trading 21 paise below its previous closing level. On Friday, the rupee had fallen 17 paise to close at 91.08 against the dollar. Let us also tell you what are the reasons due to which there has been a huge decline in the rupee against the dollar.
Why the huge fall in rupee against dollar?
- The major reason for the decline in rupee against the dollar is the dollar index. On Monday, the dollar index, which measures the dollar’s strength against six currencies, was trading 0.22 percent higher at 97.78.
- On the other hand, global oil benchmark Brent crude was up 3.91 percent at 76.78 per barrel in futures trade. Whereas during the trading session the price of Brent crude was seen crossing $82 per barrel. The analyst said that crude oil prices increased after the US and Israel carried out military attacks on Iran.
- In the domestic equity market, Sensex saw a fall of more than 2700 points and Nifty saw a fall of 533 points. Both Sensex and Nifty were seen trading at their 11-month low.
- According to exchange data, on Friday, foreign institutional investors sold equity worth Rs 7,536.36 crore. Even after that, foreign investors have invested a lot in the stock market and the record of 17 months has been broken. According to experts, migration of foreign investors may continue due to tension in the Middle East.
- According to government data released on Friday after the change in GDP calculation framework, the country’s economic growth in the currency fiscal is estimated to be 7.6 percent.
- The latest RBI data released on Friday showed that India’s forex reserves declined by USD 2.119 billion to USD 723.608 billion in the week ending February 20. Overall reserves increased by USD 8.663 billion to an all-time high of USD 725.727 billion in the last reporting week.
The danger is not over yet
In the latest attack, US and Israeli forces attacked targets in Iran on Sunday, dropping massive bombs on the country’s ballistic missile sites and destroying warships. The attacks intensified after the assassination of Iran’s Supreme Leader Ayatollah Ali Khamenei. Experts say that due to rising prices of crude oil in the international market, there is a danger of rapid increase in India’s import bill, because 85 percent of the country’s fuel requirement is met by imports.