Dollar vs Rupee: Amid rising tensions in the Middle East and a surge in crude oil prices, the Indian Rupee hit a record low of 94.82 per dollar on Friday. In the interbank foreign exchange market, the Rupee opened at 94.18 but closed at a new low after remaining under pressure throughout the day. Its intraday low was also seen at 93.96.
Regarding this fall, the main opposition party, Indian National Congress, criticized the central government. Congress shared an old video of Prime Minister Narendra Modi, questioning the current situation and criticizing the government’s economic policies.
The party states that the Rupee’s weakness raises questions about the country’s economic situation and policy management. On the other hand, the government has attributed such issues to global reasons, including rising crude oil prices, a stronger dollar, and geopolitical tensions.
Rupee’s Record Fall
The Indian Rupee hit a record low on Friday, primarily due to continuous selling by Foreign Institutional Investors (FIIs), a stronger dollar, and escalating geopolitical tensions in the Middle East. Globally, the Dollar Index also showed strength against six major currencies, further pressurizing the Rupee.
Its impact was also clearly visible in domestic stock markets. The BSE Sensex closed down by 1,690 points, or approximately 2.2%, at 73,583, while the Nifty 50 recorded a fall of about 487 points. Heavy selling was witnessed in the market due to the withdrawal of foreign investors and global uncertainty, causing investors to lose nearly 8.5 trillion rupees.
Impact on Stock Market and Rupee
Internationally, Brent Crude Oil prices have risen to approximately $109.8 per barrel, increasing additional pressure on import-dependent countries like India. High crude oil prices fuel inflation and negatively impact the current account deficit and currency.
When the Indian Rupee weakens, it directly impacts inflation. Imported goods, especially crude oil, become more expensive, leading to higher prices for petrol-diesel and everyday necessities. Additionally, the government’s fiscal deficit also increases as both subsidies and import bills come under pressure. Expenses also rise for students studying abroad, as they have to pay more in dollars.
