Rupee Crashes to Historic Low of 92.16 Against the Dollar
New Delhi: The Rupee crashed a whopping 67 paise and closed at an all-time historic low of Rs 92.16 to a U.S. dollar on Wednesday (March 4). The spiking crude oil prices and the prospect of a rising import bill of India, coming at the back of a widening current account deficit already straining the Indian economy, have left the India rupee particularly badgered.
The Iran crisis, roiling markets globally have had a sharper impact on India’s currency despite support from the Reserve Bank. This is due to trade and tariff uncertainties and a massive outflow of money away from India, earning the rupee the title of “Asia’s worst performing currency” last year.
Forex traders told PTI that “the dollar index crossed 98 levels on the risk-off situation prevailing all around the globe amid the U.S.-Iran crisis, further pressurising the rupee”.
They also told the news agency that “massive selling in domestic equity markets and withdrawal of foreign funds further dragged the Indian currency down”. The rupee fell to as low as Rs 92.35 to a dollar, before recovering somewhat. Yet, the fall was sharp and steep.
The stage was set by the fall on Monday itself, when the rupee registered its sharpest fall in a month. Yesterday, the markets were closed on account of Holi.
Brent crude, the index for global oil went up 1.29% to 82.46 per barrel.
The 30-share sensitive index, the Sensex slumped 1,122.66 points while the Nifty crashed by 385.20 points
On Monday, foreign institutional investors, as per exchange data cited by PTI, sold Rs 3,295.64 crore worth of equities.
RBI has been help keep the Rupee up, but concerns lately about reserves have made even the central bank cautious. The war in West Asia has worked to add more instability into an already volatile Indian scene where despite claims that India is doing “very well” economically and is the “fastest growing”, the value of the rupee has been a very worrying indicator of the state of confidence in the economy.
The fresh GDP data that was given out has re-evaluated the size of the economy in both 2023-24 and 2024-25, revised downward by 3.8% each. The size of the economy is now USD 3.8 trillion, “the USD 5 trillion target moving further away”, as per the Hindu newspaper.
The government claim that India now has the “fourth largest” economy in the world has also been sealed with the new data, as previously established by International Monetary Fund data late last year. At USD 3.8 trillion, India is significantly behind the Japan GDP of USD 4.46 trillion, which the NITI Aayog and the government of India have been claiming, incorrectly, India had surpassed.
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