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Why Rupee Is Falling Against Dollar: The rupee is making a record of falling every day against the US dollar. On Wednesday, the Indian rupee fell against the dollar to a record low of 90.14 per dollar. This is the all time low level of rupee. This fall in the rupee has come at a time when India’s GDP is growing at a fast pace. The MPC meeting of the Reserve Bank of India has also started. In such a situation, big steps can be taken by the Reserve Bank regarding the rupee.

Amidst the continuous decline in the rupee, people are asking why the Indian currency is becoming so weak and what effect it will have on the general public. If you have a question in your mind that why the Indian currency is under pressure, then there are many major reasons behind it. Let us know everything in detail.

Three main reasons for weakening of rupee

1. Powerful US Dollar

The biggest and most important reason is the powerful dollar. When the US Federal Reserve signals that interest rate cuts may be delayed, investors flee to the US dollar for safety. When the dollar strengthens, emerging market currencies, including the Indian rupee, naturally weaken.
The markets continue to fluctuate on the expectations of the Fed in 2025. One week traders bet on an early cut, while the next week strong US data dashes those expectations, and every time expectations change, the rupee swings with them.

2. Withdrawal of foreign investors from the market

It is also a sensitive factor for the stock market. When foreign funds withdraw money from Indian equities or bonds, they sell rupees and buy dollars in return. This increased demand for dollars naturally drives down the value of the Indian rupee.

3. Effect of crude oil prices

Crude oil is like an Achilles’ heel for India. India imports more than 85% of its crude oil. When global oil prices rise, or when the rupee is already weak, our import bill increases. This means we have to import more us dollar is required, which puts further pressure on the Indian rupee. Every small increase in crude oil also makes the rupee nervous.

What is RBI doing to maintain the rupee?

This question is often asked that what is RBI doing in this situation. The simple answer is that RBI is not allowing the rupee to fall, but is managing it very carefully. RBI strategy The price point is not fixed, but controlled. The RBI aims to reduce volatility and allow reforms in a phased manner, not to set a floor.

Impact of dollar’s strength on common man

The weakening of the rupee against the dollar has a direct impact on everyone from the common people to the government and industries. First of all, imports become expensive, because India buys many goods like crude oil, gas, electronics, machinery in dollars. Due to this, the prices of petrol-diesel, transport and everyday items may increase. Foreign travel, foreign education and sending money abroad also become expensive. On the other hand, raw materials become expensive for companies, which can increase the prices of products and increase inflation.