Rupee Falls To 82.73/$: The Biggest Fall In Four Months

A sharp fall in the Rupee was registered against the US Dollar, with the value stooping to 82.73/$. This is the lowest value registered as of September 2022. Due to the appreciation of the dollar value, not only the Rupee but other Asian currencies like the Korean Won and the Thai Bhat saw a steep fall in their values as well. There are different views relating to this change in the rupee-dollar ratio. 

The major reason for this fall is attributed to the strengthening US economy. The payroll data reflected a good picture as the economy saw a rise in the non-farm payroll, rising to 517,000 against the expected 186,000 rise. Due to this, there are chances for the US Fed to keep the interest rates high amidst the improving economic condition of the States to keep inflation in check. These higher interest rates, in turn, translate to higher funds being diverted into the US economy, appreciating the dollar’s value.

According to DBS Bank head of Treasury, Ashhish Vaidya. “This is not a rupee weakness or a risk-off sentiment in global markets and is more of a rise in the dollar index. If the dollar continues to strengthen, there is a possibility that the Rupee may breach 83,”¬†

The dealers are also attributing this fall in the value of the Indian Rupee to the uncertainty around the Union Budget, which was presented on 1 February. The budget assured that the Rupee is under the inflation limits and growth is persistent. Additionally, the other factor that escalated the fall of the domestic currency was the limited intervention by the RBI in terms of dollar sales to keep the value stable. 

According to some bankers, the cancellation of the FPO by the Adani group is also a reason for this outflow. 

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