US Dollar strengthening against Rupee, increased to 80/Rupee on Tuesday: See why is it happening?

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Early on Tuesday, the Indian rupee crossed the psychologically important threshold of 80 to the US dollar. The rupee dropped to 80.06 against the dollar, according to a Bloomberg report.

Photo :Notes of Indian Currency

Indian Rupee vs. Dollar:


Purchasing (importing) goods from abroad gets more expensive when the rupee declines. But a decreasing rupee makes India’s products more competitive if one is aiming to sell (export) goods and services to the rest of the globe, especially the US.

Is Rupee the only currency that has lost value?


No, the dollar has been strengthening against all other currencies, such as the euro and the yen of Japan. In actuality, the rupee has strengthened against a number of currencies, including the euro.


What is the exchange rate for rupees?


The amount of rupees required to purchase one US dollar is known as the rupee to US dollar exchange rate. This is a crucial indicator since Indian consumers and businesses need dollars to purchase a wide range of products and services, including crude oil, in addition to buying American goods.


Purchasing (importing) goods from outside of India gets more expensive when the rupee declines. There is also an opposite side. By the same reasoning, a decreasing rupee makes India’s products more competitive because depreciation makes it less expensive for foreigners to buy Indian products if one is aiming to sell (export) goods and services to the rest of the world (primarily the US).

Why is rupee weakening against the dollar?

The Global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of the global financial conditions are the reason behind the fall of India Rupee against the US dollar, Finance Minister Nirmla Sitharaman stated in Lok Sabha.


If we talk about experts, they said, the major reason for rupee fall is the outflow of foreign investment aggravated by the global uncertainties due to the Russia-Ukraine war and tight monetary policy by US Federal reserve.


Also, if imports from a country are higher than the exports from that particular country, the currency of that country will depreciate and the demand of dollar will be high.

What happens when rupee fall against dollar?


India makes payment in US Dollars. Now if rupee is weak, it will lead India to pay more for the same amount of thing. The cost of raw materials and production goes up which gets passed on to the consumers. Basically, it will affect India’s export and Import trade.