INDIAN RUPEE GETTING WEAKER: WHY IT IS SO?

Indian Rupee collapsed to a record low of 69.10 against U.S. Dollar on dated 28th June 2018. It bounces back a little on 29th June by 18 paise, but by looking at the global scenarios, its challenges are not looking to be less. The value of Indian Rupee has dipped low by 7% since January 2018. The rupee had touched its previous record low of 68.86 per U.S. Dollar on November 2016. Mainly higher crude oil prices kept the rupee under pressure, due to the weaker rupee against Dollar it also impacts the current Account deficit(CAD) which has gone higher of 1.9% in respects of last year CAD of 0.6% and it is anticipated that it will go much higher at 2.5% in 2019. Higher CAD means the country has to sell rupees and buy Dollars to pay its internationals bills. This further reduces the value of rupee, & obviously it will directly impact the inflation which is currently 4.87% whereas it was low in July 2018 at 1.54%.
The Global Oil prices have climbed after the U.S. asked its allies to the end imports of Iranian oil by November 2018. India imports 80 % of its crude oil consumption and Iran is the third biggest importer to India. So Indian Policy Makers, Economists must take a closer look to compensate the crude oil requirement as well the relation between India and Iran should not be getting affected.

The sustained foreign capital outflows have also played a big roll. Foreign portfolio investors have pulled out more than 466 million rupees from the capital market in this year so far. Another major factor pulling down the rupee is the ongoing trade war between U.S. and China which continues to roll for market statements.

So as if you read this article seriously so have you will come to know the fragile situation of our Indian Economy and Indian Rupees. So the question is how does this situation affect us? Firstly the Depreciating Rupee directly put inflation pressure over economy. It will cost higher to travel abroad. Currently the stock market has been left reeling.

India cannot afford the depleting situation of rupee for a prolong period because it will affect to all the developments plans of the country and to the life of common people.

So we must hope that our leaders can tackle this tough situation and once again the value of Rupee will be strong in International market.