Rupee Hits Record Low: A historic decline is being seen in the rupee against the dollar. With a weakness of 63 paise in the currency market, the rupee broke the level of 86 for the first time and fell to a low of Rs 86.60. But the trend of falling rupee is not going to stop here. Nirmal Bang Institutional Equities has said in one of its reports that the average rate of rupee against one dollar may fall to the level of 88 in the financial year 2025-26. This means that the rupee may weaken further to Rs 1.50 from the current level.
Rupee will fall to the level of 88
Nirmal Bang Institutional Equities has said in its report that Donald Trump has claimed to make the dollar stronger. After initial strength, the dollar will become stable in the coming days, which will support the currencies of emerging countries like India. According to the report, the average value of rupee against one dollar may be around 88 in the financial year 2025-26. This means that from the current level the rupee may weaken further against the dollar.
Foreign exchange reserves decreased by 70 billion dollars
India’s foreign exchange reserves have declined to $634.58 billion in the week ending January 3, 2025. In the week ending September 27, 2024, RBI’s foreign exchange reserves had reached a record high of $ 704.88 billion. That means there has been a decrease of 70 billion dollars from the record high of 704.88 billion dollars. This decline has been seen in the foreign exchange reserves due to the selling of foreign investors and the dollar sold by the RBI to stop the weakening of the rupee against the dollar.
Trump responsible for the weakness of the rupee!
For the first time on December 19, 2024, the rupee fell below 85 against one dollar. And in less than a month the Indian currency has weakened by Rs 1.60. Due to increase in demand from importers and foreign investors are withdrawing their money by selling in the stock market, this has increased the demand for dollars due to which the rupee is witnessing weakness. The rupee has continued to fall against the dollar since the results of the US presidential elections were announced. The Dollar Index has strengthened since Donald Trump’s victory and the dollar is likely to strengthen further after coming to power. Trump is to be sworn in on January 20, 2025 and hence further weakness in the rupee cannot be ruled out at the moment.
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