The value of the rupee is in a historic decline..!?
The value of the rupee is in a historic decline..!?
The indian rupee hit a record low today, sending indian economists into a panic. On october 11, the rupee crossed the 84 level against the US dollar. Today, the indian Rupee fell by 12 paise to hit a new low of 84.0975 in a single day. The main reasons for this decline are two: outflow of funds by foreign investors and rising crude oil prices amid global uncertainty. Demand for the dollar has increased in indian stock markets as foreign portfolio investors (FPIs) have been selling excess holdings in the stock market. As a result, the rupee has weakened. When foreign investors invest in india they bring in dollars. When they withdraw their investment, they take dollars out of the indian market. It is this exodus that increases the demand for dollars in india and raises its value over the rupee. Foreign investors have sold shares worth Rs 55,000 crore in the indian stock market in the last nine days alone, selling almost $1 billion worth of shares almost daily and recouping dollar investments. This trend is expected to continue, pushing the rupee further towards 84.25 in the short term.
The indian rupee hit a record low today, sending indian economists into a panic. On october 11, the rupee crossed the 84 level against the US dollar. Today, the indian Rupee fell by 12 paise to hit a new low of 84.0975 in a single day. The main reasons for this decline are two: outflow of funds by foreign investors and rising crude oil prices amid global uncertainty. Demand for the dollar has increased in indian stock markets as foreign portfolio investors (FPIs) have been selling excess holdings in the stock market. As a result, the rupee has weakened. When foreign investors invest in india they bring in dollars. When they withdraw their investment, they take dollars out of the indian market. It is this exodus that increases the demand for dollars in india and raises its value over the rupee. Foreign investors have sold shares worth Rs 55,000 crore in the indian stock market in the last nine days alone, selling almost $1 billion worth of shares almost daily and recouping dollar investments. This trend is expected to continue, pushing the rupee further towards 84.25 in the short term.