Indian rupee drops to all-time low against US dollar, THESE are the Expectations for 2025

Jyoti — Mon, 30 Dec 2024 04:42:28 +0000

The rupee has performed poorly against the dollar this year. The rupee has weakened by three percent against the US dollar in 2024. The rupee has been affected by the slowdown in the economy and the strengthening of the dollar in global markets.

The rupee hit a new all-time low at the end of 2024. The rupee has fallen by three percent till December 27 as compared to the level of 83.19 per dollar on January 1 this year. On December 27, the rupee was at a low of 85.59 per dollar. In such a situation, it is expected that the condition of the rupee will be somewhat better in 2025. The improvement in the dollar has affected the currencies of emerging markets. The impact on the exchange rate of the rupee against major currencies continued in 2024, which is full of events. However, compared to other currencies of the world, the volatility in the Indian rupee has been much less.

Due to this the weakness in rupee increased

The Russia-Ukraine war and the crisis in West Asia, along with the disruptions in trade through the Red Sea, as well as elections in many countries around the world, affected the rupee sentiment. The steps taken by the world’s major central banks and other global factors have not only affected the rupee-dollar level, but it has also affected the exchange rates of currencies in all emerging economies. In fact, the rupee has depreciated less against the dollar than other currencies. The rupee has been in profit against the euro and the Japanese yen. The then Reserve Bank of India (RBI) Governor Shaktikanta Das had said in the December bi-monthly monetary policy review that the Indian rupee has been less volatile than the currencies of emerging markets.

Rupee has fallen sharply in the last two months

In the last two months, the Indian currency has fallen by a record two rupees against the dollar. On October 10, the rupee crossed the important level of 84 per dollar. On December 19, it weakened further and reached a low of 85 per dollar. On December 27, the rupee came to its all-time low of 85.80 per dollar during day trading. On that day, the rupee saw the biggest one-day fall in two years. However, when compared with other global currencies except the dollar, the rupee has strengthened by 8.7 percent against the yen. It rose from Rs 58.99 per 100 yen on January 1 to Rs 54.26 per 100 yen on December 27. Similarly, the rupee has improved by five percent against the euro after August 27. It was Rs 93.75 per euro on August 27, which fell to Rs 89.11 per euro on December 27.

RBI is engaged in strengthening the rupee

However, despite this, the central bank is making more active efforts to stabilize the rupee-dollar rate. India’s dependence on crude oil imports and growing trade deficit have increased the demand for the US dollar. Anand Rathi Shares and Stock Brokers Director – Commodity and Currency Naveen Mathur said that the RBI has actively intervened to prevent a sharp fall in the rupee.

This is also revealed by the foreign exchange reserve data. Foreign exchange reserves have fallen from a record high of US$ 704.89 billion at the end of September to $ 644.39 billion as of December 20, 2024, which is its lowest level in almost six months. Foreign exchange assets also include the impact of the rise or fall of non-US currencies such as euro, pound and yen held in the foreign exchange reserves.

The slowdown in China’s economy also has an impact

India’s external challenges have intensified as China’s gross domestic product (GDP) growth has slowed to 4.8 per cent, reducing demand for Indian exports. In addition, tensions in West Asia and supply chain disruptions due to the Red Sea crisis have affected the trade balance of many countries, including India.

Latest News:-

The post Indian rupee drops to all-time low against US dollar, THESE are the Expectations for 2025 first appeared on Rightsofemployees.com.

Indian Rupee Again Reached a New Record Low Against the US dollar

Jyoti — Sat, 21 Dec 2024 05:59:27 +0000

The Indian rupee has once again reached a new record of decline (Rupees All Time Low) against the US dollar. The rupee closed at ₹ 85.08 with a decline of 14 paise, which is the lowest level ever.

The aggressive monetary policy of the US Federal Reserve and international economic conditions are considered to be the main reasons behind this decline (Rupees All Time Low).

Impact of US Federal Reserve policies

The US Federal Reserve has recently revised its economic projections for 2025, which has strengthened the dollar. Despite a possible reduction in interest rates, the Federal Reserve has indicated to maintain tight monetary policies. This has increased pressure not only on the Indian rupee but also on the currencies of other emerging economies.

This is what the analysts said

Analysts say that this fall of Rupee (Rupees All Time Low) is mainly due to the policy of the Federal Reserve, which has further strengthened the dollar in the international market. According to foreign exchange traders, due to this policy of the Federal Reserve, investors are turning towards safe currencies, which has had a negative impact on the currencies of emerging markets.

Stock Market and Investor Sentiment

Heavy selling in the stock market and rising crude oil prices have also added to the rupee’s weakness. Foreign institutional investors (FIIs) have pulled out capital from the Indian markets on a large scale. On Wednesday, FIIs sold shares worth a net ₹1,316.81 crore. Investors are now worried about the stability of the Indian economy, especially at a time when global economic uncertainty is growing. Increased demand for the dollar by importers has also put pressure on the rupee.

The impact of rising oil prices

International crude oil prices have risen sharply recently, increasing India’s import bill. India imports a large part of its energy needs, and the rising price of the dollar has further increased this burden. Experts believe that if oil prices remain at high levels, the rupee may face further pressure.

Journey from 84.94 to 85.08

On Thursday, the rupee opened weak in the interbank foreign exchange market (Share Market) and reached ₹ 85.08 during the day. On Wednesday, the rupee closed at ₹ 84.94 against the dollar. This is the first time the rupee crossed the ₹ 85 level.

What is the way forward?

Analysts believe that the pressure on the rupee may remain in the near future. The Indian currency may remain weak (Rupees All Time Low) until there are signs of improvement in the policies of the US Federal Reserve and the global economic scenario. However, the RBI has limited options at this time, as the impact of international economic conditions is widespread.

Strategy of Government and RBI

The government and the Reserve Bank of India (RBI) are making active efforts to keep the rupee stable. Steps such as controlling imports and giving incentives to exporters can be taken. Apart from this, policy measures are being considered to attract foreign investment and maintain confidence in the domestic market.

Impact of rupee depreciation

The weakness of the rupee also has a direct impact on the common people. The prices of imported goods may increase, which will increase the pressure on inflation. Especially the prices of petrol and diesel may increase. Apart from this, foreign education and tourism may also become expensive.

US dollar - Rightsofemployees.com