The Indian rupee touched the record weakest level against the dollar on Tuesday. And another victim of higher energy prices and stronger greenbacks.
Rupee lost about 7 percent of its value to the dollar this year as India spent more on importing energy sources such as crude oil, natural gas and coal. Prices of these commodities rose after Russia invaded Ukraine.
Another factor behind the fall in the rupee was uncertainty about the global economy, which in turn pushed the dollar to its 20-year high against the currencies of its major trading partners. Investors have withdrawn money from India and other developing countries and poured it into the United States. In the United States, the Federal Reserve is aggressively raising interest rates to curb inflation.
Rahul Bajoria, Chief Economist of India at Barclays, said: “Still, on a relative basis, the rupee feels much better,” he said, pointing out the sharp decline in the value of the euro and pound sterling against the dollar.
On Tuesday, the rupee temporarily exceeded $ 80 for the first time. The Reserve Bank of India has intervened in the market to bid on currencies, as in recent months, according to local media reports.
Inflation is slowing economic growth in India this year, as in many parts of the world. Reserve Bank officials responded by raising interest rates unexpectedly in May and then again in June to 4.9%.But inflation remains About 7 percentPut pressure on households.
Prime Minister Narendra Modi’s government has reduced taxes on fuel and restricted wheat and sugar exports. And it bought more Russian oil, and it became cheaper after the sanctions imposed by the United States and Europe.
