The impact of 50% tariff imposed on India by America is visible on Indian currency. The rupee has reached its record low against the dollar on Thursday. This decline shows how much pressure on America’s Tariff Asia’s third largest economy is putting on India. Today the rupee fell to 88.44 per dollar, which went below the record level of 88.36 last Friday. That is, today 88.44 rupees are being received against 1 dollar.
It is clear from this weakness of the rupee that the American tariffs implemented since last month are losing their trust from India and the rupee is being affected the most in Asian countries. So far this year, foreign investors have taken out a total of $ 11.7 billion from the Indian shares and bond markets. America’s strict tariffs have made negative effects on India’s economic growth and trade and shaken the rupee.
Government takes necessary steps
To reduce the impact, the central government has cut the rates of GST. Apart from this, both countries are trying to remove the obstacles related to business through mutual dialogue. At present, exporters are uncertain about the order coming, while the importer has to do more hedging, due to which the balance of demand and supply in the currency market is deteriorating. Hedging is the strategy of a risk management.
How RBI is controlling
The Reserve Bank of India is constantly interfering so that the speed of the rupee decline does not increase much. People associated with the market say that the central bank is handling the fluctuations by selling dollars and saving from big shaking. Here, bankers say that RBI is not trying to stop the rupee at a particular level, but wants to control the decline so that companies and investors do not spread nervousness.