Kelvin Testimony Amachree
The Indian rupee (INR) has had a tough time in currency markets, struggling against the robust US dollar (USD). Despite a slight recovery, the INR fell to 83.63 against the USD, raising worries about its weakening position.
Several factors contribute to the rupee’s decline, including high crude oil prices impacting the Indian economy, a strong USD globally, foreign capital outflows, and heavy foreign fund outflows from domestic markets. The US Federal Reserve’s interest rate hikes and speculation about further increases have also affected the rupee, along with various other pressures.
Indian Rupee’s Battle Against the Strong Dollar
Despite India’s strong economic growth, the rupee has struggled against the US dollar. Equity outflows and corporate demands for USD have hindered the rupee’s progress. The Indian stock market’s downturn has led to significant foreign and institutional investor exits, resulting in a $2.6 billion equity sell-off in India. Meanwhile, USD inflows into the debt market have strengthened the American currency further, making it dominant in the forex market.
Except for the Hong Kong dollar, which has resisted the USD’s strength, most Asian currencies, including the Indian rupee, have succumbed to the greenback’s dominance. The rupee’s depreciation is worrying, but experts believe any further decline will likely be gradual, highlighting the current supremacy of the US dollar in global markets.