• MyLove @M
• 11 Jan, 2025

The Indian Rupee has reached its weakest point ever with its value dropping to Rs 86.20 against the US Dollar. This marks a significant economic concern with experts predicting the Rupee could soon fall to Rs 90 to 95 per Dollar. Here's a simplified and unique take on the current financial scenario.

Current Scenario

- On January 10^th the Rupee touched a record low at market close.

- By this Saturday morning it fell further by 37 paise to ₹86.20 per Dollar.

- This marks a continuous 10 week decline fuelling fears of an economic crisis.

Market Impacts

1. Stock Market Decline

- Share markets continue their downward spiral adding to the economic worries.

2. Foreign Investments Withdrawn

- Data from January 9^th reveals Rs 7,170.80 crore worth of foreign investments exited Indian markets.

Economic Expert Insights

Economists are raising red flags about the situation

- Persistent Rupee weakness is attributed to a strengthening Dollar.

- Foreign investors are pulling out funds creating a liquidity crunch.

- Amit Pabari, MD of CR Forex stated that $420 million has exited Indian markets recently.

Key Reasons for Rupee's Decline

1. Global Oil Prices Surge

- Rising international crude oil prices are straining the Indian economy.

2. US Economic Policies

- Uncertainty surrounding US President Donald Trump’s trade policies is unsettling global markets.

3. RBI’s Limited Interventions

- The Reserve Bank of India (RBI) faces criticism for its inability to stabilise the Rupee.

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Future Predictions

Research Forecasts

- Gavekal Research suggests the Rupee could drop to Rs 90 to 95 per Dollar if the trend continues.

Domestic Liquidity Deficit

- RBI's liquidity deficit reached Rs 87,985 crore in January limiting its response options.