The value of the rupee has dropped to a historic low. It dropped 35 paise versus the US dollar on Friday, March 22, closing at an all-time low of Rs 83.48 per dollar. The rupee ended at its lowest value of 83.40 versus the US dollar earlier on December 13, 2023.
Research analyst Anuj Chaudhary claims that the weaker euro and pound helped to enhance the US dollar. The rupee was under pressure due to the dollar's rise and the Chinese yuan's decline. In addition, there is a dollar scarcity in the market, which has impacted the rupee negatively.
Simultaneously, dealers were reported by Reuters to have stated that the collapse in the overseas Chinese yuan and strong local dollar demand at the end of the session caused the Indian rupee to plummet to its lowest level versus the US dollar on Friday.
The rupee also fell to its lowest point within a day.
The rupee fell as low as 83.52 intraday, the lowest amount compared to the dollar. The rupee gained 6 paise against the US dollar last Thursday, closing at 83.13 per dollar. On the other hand, the rupee closed at 83.19 against the dollar earlier on Wednesday.
This fiscal year, the rupee has lost 1.22% of its value thus far.
The rupee has lost roughly 1.22% of its value in the current fiscal year (2023–24). The rupee was at Rs 82.39 per dollar at the start of the 2023–24 fiscal year, but it is currently worth Rs 83.48 per dollar.
The cost of imports will be high.
A decline in the value of the rupee implies higher import costs for India. In addition, studying and traveling overseas have become more costly. Assume Indian students in America were able to exchange one dollar for fifty rupees, while the rupee was worth fifty against the US dollar. Students now have to pay Rs. 83.40 for a dollar. As a result, everything will cost more, including fees, lodging, food, and other necessities.
How is a currency's value calculated?
The term "falling, breaking, or weakening of the currency" refers to any decrease in the value of another currency relative to the US dollar. English-language currency depreciation. Every nation possesses foreign exchange reserves that are used for cross-border transactions. The currency price is directly impacted by changes in foreign reserve levels.
The value of the rupee will not fluctuate as long as the dollars in India's foreign reserves match the dollars in US reserves in rupees. The rupee will fall if our dollar weakens, and it will strengthen if it increases. We refer to this as a floating-rate system.
