Rupee fell due to US central bank Federal Reserve decision, what will be its effect?

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doller-rupees

New Delhi: The head of the US central bank Federal Reserve, Jerome Powell, has created panic in the markets around the world by saying that interest rates will continue to increase till inflation is controlled. After this, with the fall in the stock market, today there is special pressure on the rupee in the currency market.

The Indian currency fell 24 paise to a record low of Rs 80.11 against the dollar in the Forex market on Monday morning. The rupee had closed at 79.87 in the previous trading session. Earlier, the lowest level of the rupee was 80.06 per dollar, which was reached in the last month i.e. July. If we talk about the year 2022, so far there has been a big decline of 7 percent in the Indian currency against the dollar.

The expert said, was the decision taken in haste
Forex market experts say that the head of the Fed Reserve seems to have made a hasty decision this time. In his speech of just 8 minutes, he emphasized only one thing interest rates will continue to rise till the inflation rate comes down to 2 percent. This is bad news for business and home buyers and its impact will be visible in all sectors. This is the reason that today most of the stock markets of America, Europe, and Asia are in a downtrend.

Dollar at 20-year high
Not only the Indian currency in the global market but also currencies like Euro, and Pound are under heavy pressure and their rate has gone down to a record low level. The US dollar is currently at a 20-year high, while Asian currencies are trading down by 0.50 percent today. China’s currency Yuan has gone down to a low of 2 years, while the Indian rupee is trading between Rs 79.70 to 80.30.

doller-rupees

What is the effect on foreign investment?
Market experts say that the dollar index can go up to the level of 109 in the coming few days. However, foreign investors will continue to buy in the Indian stock market and FPI investments will continue in the coming months as well. Exporters will also benefit from this, but imports may become more expensive.

Crude oil prices rise again
According to experts, the price of crude oil may increase further in the coming time. On the one hand, OPEC has said to cut its production, on the other hand, the rupee is depreciating against the dollar, which will make it expensive to import crude. Its effect will be directly visible on the import bill and pressure on petrol and diesel prices will also increase.

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