New Delhi: The Rupee has continued to fall.
The Press Trust of India reported that the Rupee dropped by 7 paise on Thursday (July 25) to close at an all time low against the US Dollar at 83.78.
Business Standard reports that on Thursday (July 25) it was for “the fourth day in a row that the local currency has hit a low. The Reserve Bank of India has intervened regularly to support the rupee, capping its decline.”
PTI links the fall in the Rupee in recent times to the government raising “tax rates on capital gains in the FY25 Budget” It also drew in global factors adding to domestic pressures, “a weak tone in the US dollar and weakness in crude oil prices also put pressure on the domestic unit,” citing foreign exchange traders.
The Rupee has been sliding downwards for some time now, and it had earlier recorded its lowest closing level of 2023, of Rs 83.40 to a dollar on December 13, 2023.
The Indian rupee fell to another record low on June 20 this year, “pressured by likely outflows and strong dollar demand from local importers”, reported Reuters. The rupee then declined to 83.62 against the U.S. dollar.
While the central bank has routinely intervened “via state-run banks to limit rupee depreciation, such dollar offers were absent in June, reported the agency, quoting a foreign exchange trader at a state-run bank. It was this that they said, pushed the rupee to hit a record low.
As per analysts, between April-end 2014 and April 2024, “roughly the time the Narendra Modi-government has been in office – the rupee has depreciated by 27.6% against the US dollar, from Rs 60.34 to Rs 83.38.” The depreciation of the Rupee has been falling more against the dollar in the past ten years, than in the ten years preceding that.
The volatility in the Rupee and the continual and sharp fall has been a matter for the political arena, with the opposition Congress taunting Modi and his government for being scathing about Rupee falls when the UPA was in power, but going silent with steeper falls in his tenure.
Supporters backing the BJP and Modi in 2014, had serenaded him as being the possible reason for making the Rupee as “strong” as Rs 40 to a dollar. Art of Living founder, businessman and self-proclaimed godman, Sri Sri Ravi Shankar had famously said, “It is refreshing to know that the rupee will get stronger at Rs.40/- per dollar if Modi comes to power”.
This article, originally published on July 25, 2024, at 2:54 PM, was republished a day later, on July 26, 2024, at 10:28 AM, with the day’s update.’
