New Delhi: After slight recovery shown by the Indian currency on September 3, 2018, Rupee has again started to slide and now it has touched the 72 mark against the US Dollar for the first time ever.
Today, for the first time ever despite a slight ease in the US Dollar in the global market, the Indian Rupee slipped below the 72 mark. With this downfall, the Indian currency enters the list of one of the worst-performing currencies among the emerging markets as it has witnessed the downfall of more than 12 per cent on a year-to date-basis.
This downfall also showcases that the result of ET survey might become a reality soon. The exclusive survey of ET revealed that by the end of 2018, Rupee might slip down to 73.
Notably, the Rupee closed at 71.75 yesterday and earlier in the day resumed at 71.65 while it traded at 72.05 during the afternoon today witnessing a downfall of 29 paise.
According to the report of Reuters, despite Rupee reaching the 72 mark, the Reserve Bank of India is not looking forward to intervene. Supposedly, it has been selling dollars earlier in the day.
Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI was quoted by ET that the 13 per cent downfall in 2018 in Rupee and almost 7 per cent downfall since June 2018 to a great extent is in accord with the dollar strengthening against all countries.
He further added, “The rupee could not have been immune to such and hence the current depreciation was long overdue and trends in NDF market (rupee at 75 and implied 1-year yield at 7.7 per cent) suggest the pain might not be just over yet.”
Arun Jaitley, Finance Minister, who resumed the charges in August itself after illness said that the downfall in the rupee is due to the global factors and no one should panic on this. He also stated that RBI is taking the necessary steps to deal with the downfall.
This has been the worst month for Rupee in three years. The reason behind this has been the speculation sanctions on Iran which resulted in the shrink in global supplies. The import bill for the world’s fastest-growing oil user has gone up to 76 per cent in July from a year earlier to $10.2 billion. This has resulted in the increased trade deficit which went up to $18 billion – highest in five years.
Almost 83 per cent of crude oil is imported by India.