The Indian Rupee plunged to a new all-time low against the US Dollar on Monday, reflecting persistent concerns about India’s widening current account deficit and the impact of escalating global trade tensions.
The rupee’s decline has been attributed to several factors, including increased demand for dollars from importers and foreign investors pulling out of Indian markets. Rising crude oil prices have also put pressure on the rupee, as India is a major oil importer.
Market analysts anticipate that the Reserve Bank of India (RBI) may intervene in the foreign exchange market to curb the rupee’s volatility. However, the extent and timing of any intervention remain uncertain.
A weaker rupee can have both positive and negative effects on the Indian economy. While it can boost exports by making them more competitive, it can also increase the cost of imports, potentially leading to higher inflation.
The currency’s movement is being closely watched by investors and policymakers alike, as it has implications for India’s economic growth and stability.