Rupee Slumps to Dip Below 74 for First Time against Dollar

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Do you know the latest Indian Rupee exchange rate against the American dollar?

The Reserve Bank of India’s monetary policy decision to keep key policy rates on hold, strangled the rupee further against the dollar, making it dip to an all-time new low against the dollarSlumping below 74 to reach 74.23 for the first time in its history, the rupee recovered to finally settle at 73.76, 18 paisa below its previous closing of 73.58.

Indian Rupee Exchange Rate

Coming back to the Indian Rupee Exchange Rate, the recent downfall in the rupee is being attributed to the RBI’s decision to keep its lending rates unchanged. Repo rates remained at 6.5% but the RBI changed the stance from neutral to calibrated tightening, leading to an immediate decrease in the rupee’s value. Reverse repo rates also stayed unchanged at 6.25%.

The decision taken by the RBI surprised the market given a wide belief that India’s central bank would increase the benchmark interest. A rate increase would have helped curb inflation fuelled by the rupee’s weakness and surging crude prices, helping strengthen the economy. Currency markets were left disappointed by the move, especially with the RBI’s lackluster response to help strengthen the rupee. Ever since the rupee has fallen, the RBI has shown limited intervention in trying to help it recover.

Indian Rupee Exchange Rate

The RBI in a move to claim markets held a press-conference chaired by Governor Urijit Patel who said that the rupee is faring better against other currencies that are weakening against the dollar. The Finance Minister Arun Jaitely echoed the same sentiments, calling the decrease in the rupee’s value a global phenomenon.

The minister, who was speaking at the Hindustan Times Leadership Summit in the national capital, said, “Most currencies are weakening against the Dollar, it is a global phenomenon.” “I don’t think the sentiment with regard to the Indian economy is negative.”

The fall in the rupee’s value is something has been led by a manifesto of issues. Rising global crude oil prices, a widening current account deficit at home, and fears of international trade wars have spooked the currency market, leading to several currencies underperforming versus the dollar.

Foreign investors have also pulled out $9.7 billion from the domestic market this year, further dragging down the currency. Arun Jaitley asserted that foreign direct investments to India will not be affected by the weakening rupee.

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