New Delhi: After Russia attacked Ukraine (Russia-Ukraine Crisis), the value of the dollar against the rupee increased significantly. On the contrary, the value of Rupee (Rupee to Dollar) has fallen a lot against the dollar. On Monday, the rupee made its new low against the dollar, which was 77.11. Market experts are of the opinion that the rupee can go down by breaking the level of 80.
The Economic Times has conducted a poll with 14 different brokerage houses, banks, and treasury departments. The results of this poll have revealed that investors will invest money in safe-haven (where the investment is safe) assets and their demand will increase.
The participants of this poll said that the currency market can show a lot of volatility in the next few weeks. Especially until the Ukrainian war is brought to a diplomatic conclusion.
Rs.80-82 may come
Amit Pabri, Managing Director, CR Forex said, “The way the situation has been in the last one month, it will not calm down easily. He further said, “The central bank can intervene, but deteriorating fundamentals will not allow traders to rely on the rupee against the dollar for a long time. FPIs are selling risky EM assets.”
The people involved in the poll believe that the rupee can fall to 77.93 in this calendar year. 2 participants in the poll had predicted the rupee to fall in the range of 80-82 this year. Zenith FinCorp CEO Saurabh Goenka said, “We can see the rupee depreciating to $80 per US dollar in CY22.”
Saurabh Goenka further said, “It is very likely that the RBI will be more liberal than the Fed and support the Government Fiscal Borrowing Program. The falling rupee creates liquidity of the rupee in the system, thereby attracting foreign investors towards local debt.”
Volatility is expected to end soon
However, experienced traders expect this volatility to fade away relatively soon. Abhishek Goenka, Founder, IFA Global, said, “Even though the rupee is depreciating in the short term due to geopolitical risks, rising crude oil, and outflow of funds, it will soon recover. may return to its five-year average, which is around 2.5%.”
If the rupee falls further, what will be its effect?
The weakness of the rupee directly means inflation. This will affect the goods imported into the country and computers, imported mobiles and gold will be expensive. Rupee will fall further and petrol, diesel prices will increase more rapidly. Apart from this, RBI can increase the rates of interest.
