Rupee Fells Due To Strong Dollar Crude Oil Price Rise Inflation To Rise In Festive Season

Rupee-Dollar Update: The trend of weakness in the rupee against the dollar continues. On Wednesday, September 6, 2023, the rupee has declined to the level of 83.09 against one dollar. If the rupee remains above the level of Rs 83 against the dollar, then the difficulties of RBI may increase.

By the way, for the last one month, there has been a continuous strengthening of the dollar against the rupee. The rupee has depreciated by 38 paise since August 2, 2023. In the same period, there has been a jump of more than 10 percent in the prices of crude oil in the international market. Weakness in rupee and expensive crude oil have increased India’s troubles.

Market experts believe that the main reason for the weakness in the rupee is the strengthening of the dollar and the increase in the price of crude oil, which has just crossed $ 90 per barrel. The rupee has also weakened due to the withdrawal of investors’ money from India. Weakness in China’s currency Yuan has also increased the pressure on all Asian currencies including rupee, due to which weakness is also seen in rupee.

What will be the effect of weakness?

pulses-edible oil import will be expensive

Similarly, food inflation in India has reached 11.51 percent in the month of July. There is a rise in the prices of pulses. The government is considering importing wheat. In such a situation, the import of food items can become expensive after the fall in the rupee against the dollar.

Buying crude oil will be expensive

India imports more than 80 percent of its crude oil consumption. On the one hand, crude oil has crossed $90 per barrel, then after the strengthening of the dollar, it will become expensive for India to buy crude oil. Government oil companies buy crude oil by paying in dollars. Now to get dollars they have to spend more rupees.

decline in foreign exchange reserves

To stop the weakness in the rupee, the RBI has sold dollars, after which the foreign exchange reserves have come down to $ 600 billion. If the rupee weakens further and the selling of investors continues, then there may be further reduction in foreign exchange reserves.

Buying gold will be expensive!

India is one of the major gold importing countries. The season of festivals has arrived. From Ganesh Chaturthi, Navratri, to Dhanteras, people buy gold on Diwali. If the import of gold becomes costlier due to the strength of the dollar, then there can be a rise in the prices of gold in the country. In such a situation, buying gold in the festive season is going to cut your pocket.

Cars can be expensive!

Automobile companies import parts of vehicles. Weakening of rupee against dollar may make import of these parts costlier. If the cost of automobile companies increases due to the weakness of the rupee and the strength of the dollar, then they can increase the prices of vehicles during festivals.

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