Rupee not sliding instead Dollar strengthening: Anil Singhvi explains HOW
Rupee vs Dollar: Other currencies have declined against the US dollar by 18-20 percent while Indian Rupee has only declined 10 per cent.
Rupee vs Dollar: Finance Minister Nirmala Sitharaman recently said that ‘Rupee is not sliding but the US dollar is strengthening'. To understand the whole scenario, Zee Business Managing Editor Anil Singhvi in a special segment explained how the dollar is gaining strength.
According to Singhvi, there are 4 factors on which Indian Rupee should be judged:
1. US Dollar’s strength against other currencies
The US Dollar has strengthened 18-20 per cent against other currencies.
2. Did dollar gain against Rupee as much as other currencies?
The Indian rupee has only weakened 10 per cent against the US dollar while other currencies weakened more than that. In October 2021, Indian Rupee against $1 was 75 which in October 2022 is around 82.
3. Is the Rupee weak against the US dollar and other currencies too?
Rupee has declined against the US dollar surely but it has gained strength against other big currencies like Great Britain’s Pound, European Euro, and Japan’s Yen
Great Britain Pound
The Indian Rupee strengthened almost 10 per cent against Great Britain’s pound in a year.
Oct 21- 1GBP= Rs 103
Oct 22 1 GBP= Rs 93
Against European Euro, the Indian Rupee saw an upward trend of almost 9 per cent.
Oct 21 1 Euro= Rs 87
Oct 22 1 Euro= Rs 81
The Indian Rupee strengthened almost 17-18 per cent against Japan’s Yen
Oct 21- 1 yen= Rs 0.65
Oct 22- 1 yen= Rs 0.55
4. How other currencies performing against the US Dollar?
Other currencies have declined against the US dollar by 18-20 percent while Indian Rupee has only declined 10 per cent. This shows that the Indian rupee is not weak against other currencies but just the US Dollar.
#DollarvsRupee:‘Rupee फिसल नहीं रहा है, Dollar मजबूत हो रहा है’
वित्त मंत्री #NirmalaSitharaman के बयान के बाद सबसे चर्चित विषय...
मजबूत या ₹ कमजोर
— Zee Business (@ZeeBusiness) October 19, 2022
Why did the Indian Rupee weaken against the US dollar?
India imports crude oil in US dollars like other international countries which leads to buying of US dollars. Crude Oil takes up 30- 40 per cent of space on the import bill and with the Russia-Ukraine war the prices of fuel are skyrocketing.
Another reason for the US dollar's strengthening is the increase in US Fed interest rates. The US Fed has increased the interest rate in the US from 0 per cent to 3.5 per cent, which has increased investment in the US Fed bank as for investors it is a safer option. To invest in US Fed Bank, investors have to buy the US dollar.
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