Rupee hits all-time low against Dollar amid fears of recession in US
Updated: Aug 5th, 2024
The rupee has depreciated against the dollar due to the rise in the dollar index amid signs of a recession in the US, a crash in the stock market, and selling by foreign investors.The Indian rupee hit a record low against the US dollar after the Indian stock market crashed. After crossing the 83.75 level against the dollar Aug 2, the rupee reached its lowest level ever against the US dollar at 83.86 today.
Ajay Kedia of Kedia Commodities said that foreign investors in the Indian capital market are facing difficulties due to the fear of recession in America. This has resulted in a sharp decline in emerging markets. The massive selling of shares by foreign investors is also reflected in the rupee.
The report says that job cuts in the US have created a crisis in the global market and increased concerns about a recession. On the other hand, the geo-political crisis has also increased.
As the rupee weakens, the burden on the government will increase. Also, the tension of forex traders has increased. Imports are likely to become expensive in India. Rising crude prices could affect India’s economic situation. The RBI may take steps to manage the rupee. The RBI may start selling dollars on a large scale. Dollar sales through government banks may increase.
Petrol-diesel will become expensive
With a one rupee increase in the value of the dollar, the burden on oil companies has increased by ₹8,000 crore. Due to the depreciation of the rupee, imports of petroleum products will become expensive. HPCL, IOC and BPCL may increase the local price of petrol and diesel.
An increase in diesel prices will increase freight, which could lead to inflation.
Apart from this, India also imports a large amount of edible oil and pulses. Due to the weakening of the rupee, the prices of edible oil and pulses in the domestic market may increase.
A 10% increase in the prices of petroleum products is likely to increase inflation by about 0.8%. This will directly affect your food and transportation costs.
Also read :
Bears growl! Sensex falls 885 points, investors lose over ₹4 lakh crore
Your privacy
By clicking “Accept all cookies”, you agree Gujarat Samachar can store cookies on your device and disclose information in accordance with our Cookie Policy