Why is the Indian Rupee facing a downfall? The value of the Indian rupee has been going down since the beginning of this year. On 18th July, 2022 the value of USD skyrocketed to 80.064 INR; the highest of all time. And the higher the value of dollar against rupee the more expensive it gets for Indians to run their households.
Why its value continuously going down?
The Russia-Ukraine war has affected most of the countries around the world. According to the experts, the main reason behind the depreciation of the Indian Currency is the after effects of the Russia-Ukraine war.
But this is not the only reason
Also, more imports than exports, high crude oil prices, global economy being hit by the pandemic, outflow of foreign capital from the domestic markets, etc. are responsible.
The rate at which the imports are increasing is alarming for the economy. Following the Russia-Ukraine war the prices of the crude oil has been rising. The import of raw materials has also been increasing, coal is an essential item on this list. Higher rate of import than export causes the value of the currency to go down.
What else is causing this fall?
Another ground that has affected the rupee-dollar exchange rate is the outflow of money from the domestic market. According to the reports, the foreign institutional investors who had invested money in the Indian market have sold some of their shares this year. The estimated amount of money that was withdrawn was over $30 billion dollars. This has caused the massive drop of rupee against dollar.
How this fall adversely affecting the us?
‘Inflation’ would be a mere term to describe the challenges Indians have been facing because of the devaluation of Indian Rupee.
The higher the value of dollar against rupee the more expensive it gets for Indians to run their households. The prices of items will go up with the fall of rupee against dollar. Prices of imported goods including crude oil, electronic items, cars, etc. have gone up.
Traveling abroad will be much more expensive and Indian students studying abroad will have to bear a higher cost. The inflation may also lead to decline in the living standards of the people.
However, the Rupee is not the only currency affected by the above sited causes. Other currencies like pound, yen, euro are also facing depreciation.
- IIT Delhi’s Rural Technologies Going Intercontinental
- मेडिकल डेटा प्लेटफॉर्म विकसित करने के लिए नई साझेदारी
- 188 Districts Of The Nation Saw Inadequate Rainfall: IMD
About Author
