Looking at the entire year, the rupee has weakened by more than 5 percent so far. This performance is considered very weak on a global level.
रुपया नौ पैसे टूटकर अब तक के सबसे निचले स्तर पर, 1 अमेरिकी डॉलर के मुकाबले 90.58 पर पहुंचा
The Indian rupee’s decline shows no sign of stopping. On Monday, the rupee continued its downward trend, reaching a new all-time low of 90.58 against the US dollar. Previously, on Friday, the rupee had slipped to 90.55. The fact that the rupee hit a record low for the second consecutive week is considered a significant signal for the market.
Why is the Rupee Weakening?
According to experts, the rupee’s weakness is not due to a single factor, but rather a combination of pressures. Delays in the India-US trade agreement, continuous outflow of foreign capital, and a widening trade deficit are weighing heavily on the rupee. In addition, strong demand for dollars from Indian companies is also increasing pressure on the currency.
The high tariffs of up to 50 percent imposed by the US on Indian exports have also exacerbated the situation. These tariffs have impacted Indian exporters, which is directly affecting the demand and supply of the rupee.
More than 5% Decline in a Year
Looking at the entire year, the rupee has weakened by more than 5 percent. This performance is considered extremely weak globally. Among 31 major global currencies, the rupee has been the third worst-performing currency this year. Even more concerning is that this decline has occurred at a time when the dollar index itself has fallen by more than 7 percent.
Why is the 90 Level Important?
The rupee falling below the 90 level is not just a number. Analysts say this level is psychologically very important because it represents approximately half the value of the rupee in 2011. After crossing this threshold, the market’s attention is now focused on the Reserve Bank of India.
Major Challenge for the RBI
The continuous decline of the rupee has presented a significant challenge for the RBI Governor in maintaining a balance. On one hand, it is not possible to completely control the currency. On the other hand, market instability cannot be allowed.
In the past few months, the Reserve Bank has intervened several times to stabilize the rupee. However, experts believe that the intensity of intervention decreased after the 88.80 level. Even after the rupee crossed 90, the RBI’s approach appeared relatively restrained.
RBI’s Role in International Markets
The RBI’s involvement in rupee trading is not limited to the domestic market. It is also active internationally, particularly through the non-deliverable forward (NDF) market, where settlements are made in dollars. This intervention is carried out through the Bank for International Settlements and involves the cooperation of select large banks located in major trading hubs such as Singapore, Dubai, and London.
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