As prices of basic commodities increase in India due to inflation, the Indian Rupee has further tumbled down against the United States (US) Dollar on Thursday, hitting a new record low. According to today’s data, one US dollar is now worth 77.81 Indian rupees.
The reason behind the Indian rupee falling against the US dollar has been attributed to the persistent selling by foreign institutional investors in the equities markets amid a surge in crude oil prices and rising inflationary pressure.
At the interbank foreign exchange market, the partially convertible rupee slumped by 13 paise to hit a record low of 77.81 against a US dollar. The previous record low of the Indian rupee stood at 77.7975 touched on May 17.
The recent surge in crude oil prices and inflationary pressure has led to the decline in the value of the rupee. Many financial experts have stated that the major reason behind the surge in oil prices is the Russia-Ukraine war, which has greatly affected international markets.
Meanwhile, inflation has emerged as a major headache for investors in India, as the rise in the prices of basic commodities and crude oil has resulted in a rise in imported inflation. Policymakers in India are being questioned over their reforms, with the rate of crude oil skyrocketing with each passing day.
The Reserve Bank of India (RBI) on Wednesday raised the inflation forecast for the current financial year to 6.7 percent from its earlier projection of 5.7 percent.
As per the RBI’s new projection announced after the Monetary Policy Committee (MPC) meeting, inflation is likely to remain above the central bank’s upper tolerance limit of 6 percent for the first three quarters of 2022-23.
During a monetary policy statement yesterday, RBI Governor said, “It may be noted that around 75 percent of the increase in inflation projections can be attributed to the food group. Further, the baseline inflation projection of 6.7 percent for 2022-23 does not take into account the impact of monetary policy actions taken today.”
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(With ANI inputs)
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