On Friday, March 22, the Indian Rupee reached its all-time low against the US Dollar. This was accompanied by a decrease of 35 paise in the value of the rupee against the dollar, with the exchange rate reaching 83.48 rupees per dollar, marking the lowest level so far. It’s worth noting that the rupee had previously closed at 83.40 against the dollar on December 13, 2023, which was the previous lowest level.
Factors Behind Indian Rupee’s Depreciation Against Dollar: Euro, Pound Weakening and Dollar Strength, Yuan Decline, and Market Dollar Shortage
The primary reason behind this depreciation is attributed to the weakening of the Euro and the Pound, which strengthened the US Dollar. Additionally, the decline in the Chinese Yuan also exerted pressure on the rupee along with the dollar’s strength. Moreover, there has been observed a shortage of dollars in the market, which has significantly impacted the rupee.
Furthermore, there has been a significant drop in the foreign Chinese Yuan. Towards the end of the trading session, aggressive local dollar demand led to the Indian Rupee reaching its lowest level against the US Dollar.
Even intraday, the rupee slipped to 83.52, the lowest level so far against the dollar. During the current financial year (2023-24), the rupee has remained approximately 1.22% weaker. In the beginning of the financial year 2023-24, the rupee started at 83.48 against the dollar.
The depreciation of the rupee against the dollar could potentially lead to an increase in the prices of imported goods, making them more expensive for Indian consumers. This could have implications for inflation and overall economic stability.