Rupee Slums To All Time Low, Dollar Reaches 20 Year High Level

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Rupee Slums To All Time Low, Dollar Reaches 20 Year High Level
26 Sep 2022
6 min read

News Synopsis

At present, the Indian rupee seems to be trembling in front of the US dollar's earthquake. On Monday morning, 56 paise fell against the dollar and opened at the 81.54 level. This is the lowest level ever for the rupee and the dollar has reached a 20-year high. However, there was a slight increase in it later. Crude oil and other commodity imports will become expensive due to the fall of the rupee to a record low against the dollar. This will further increase inflation.

The Reserve Bank of India (RBI) is already expected to increase the repo rate on 30 September to curb inflation. The increase in the interest rate once again by the Federal Reserve has put pressure on the Indian rupee. Inflation is expected to increase due to a widening trade deficit and foreign capital outflow. The meeting of the Monetary Policy Committee (MPC) of the Reserve Bank is to be held this week.

BV Mehta, executive director of the Solvent Extractors Association of India, an association of millers, said that due to the strengthening of the dollar, the cost of imported edible oils will increase. This will only affect the customers. The trade deficit more than doubled to $27.98 billion in August due to increased crude imports.

The rupee going to the lowest level against the dollar will have a direct impact on the common man. Its biggest impact will be visible on imported things. The prices of things imported into India will increase. 80 percent of crude oil is imported into the country, that is, India will have to pay a higher price for crude oil and foreign exchange will be spent more.

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