The Indian rupee has once again reached a new record of decline (Rupees All Time Low) against the US dollar. The rupee closed at ₹ 85.08 with a decline of 14 paise, which is the lowest level ever.
The aggressive monetary policy of the US Federal Reserve and international economic conditions are considered to be the main reasons behind this decline (Rupees All Time Low).
Impact of US Federal Reserve policies
The US Federal Reserve has recently revised its economic projections for 2025, which has strengthened the dollar. Despite a possible reduction in interest rates, the Federal Reserve has indicated to maintain tight monetary policies. This has increased pressure not only on the Indian rupee but also on the currencies of other emerging economies.
This is what the analysts said
Analysts say that this fall of Rupee (Rupees All Time Low) is mainly due to the policy of the Federal Reserve, which has further strengthened the dollar in the international market. According to foreign exchange traders, due to this policy of the Federal Reserve, investors are turning towards safe currencies, which has had a negative impact on the currencies of emerging markets.
Stock Market and Investor Sentiment
Heavy selling in the stock market and rising crude oil prices have also added to the rupee’s weakness. Foreign institutional investors (FIIs) have pulled out capital from the Indian markets on a large scale. On Wednesday, FIIs sold shares worth a net ₹1,316.81 crore. Investors are now worried about the stability of the Indian economy, especially at a time when global economic uncertainty is growing. Increased demand for the dollar by importers has also put pressure on the rupee.
The impact of rising oil prices
International crude oil prices have risen sharply recently, increasing India’s import bill. India imports a large part of its energy needs, and the rising price of the dollar has further increased this burden. Experts believe that if oil prices remain at high levels, the rupee may face further pressure.
Journey from 84.94 to 85.08
On Thursday, the rupee opened weak in the interbank foreign exchange market (Share Market) and reached ₹ 85.08 during the day. On Wednesday, the rupee closed at ₹ 84.94 against the dollar. This is the first time the rupee crossed the ₹ 85 level.
What is the way forward?
Analysts believe that the pressure on the rupee may remain in the near future. The Indian currency may remain weak (Rupees All Time Low) until there are signs of improvement in the policies of the US Federal Reserve and the global economic scenario. However, the RBI has limited options at this time, as the impact of international economic conditions is widespread.
Strategy of Government and RBI
The government and the Reserve Bank of India (RBI) are making active efforts to keep the rupee stable. Steps such as controlling imports and giving incentives to exporters can be taken. Apart from this, policy measures are being considered to attract foreign investment and maintain confidence in the domestic market.
Impact of rupee depreciation
The weakness of the rupee also has a direct impact on the common people. The prices of imported goods may increase, which will increase the pressure on inflation. Especially the prices of petrol and diesel may increase. Apart from this, foreign education and tourism may also become expensive.
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