On Monday, the rupee closed at all-time low against the dollar.
Such a decline in rupee is rarely seen. When the currency market opened in the morning, there was a decline of about one and a half rupees in the rupee against the dollar. By the time the market closed, this figure came down to 82 paise. But this decline is also not small at all. The main reason for such a huge fall in the rupee was Trump's rejection of Iran's response to the peace proposal. Also, an increase of more than 5 percent was seen in the prices of crude oil. The outflow of foreign investors in the current year has crossed the figure of Rs 2 lakh crore. On the other hand, the appeal for savings made by PM Modi also contributed significantly to the decline. Let us also tell you what kind of figures are being seen in the currency market.
Rupee falls by 82 paise
On Monday, the rupee fell 82 paise against the US dollar and closed at its lowest ever level of 95.31 (provisional). This fall came when US President Donald Trump rejected Iran's response to the West Asia peace proposal, after which crude oil prices increased rapidly. Prime Minister Narendra Modi appealed to citizens to avoid buying gold and adopt savings measures, which further jolted market sentiment.
According to Forex traders, the strengthening of the US dollar and rapid outflow of foreign capital put further pressure on the local currency. At the Interbank Foreign Exchange, the rupee opened at 94.97 and traded in the range of 94.87-95.34. Ultimately, it closed at its all-time low of 95.31 (provisional), which was 82 paise lower than its previous close. On Friday, the rupee had closed at 94.49 against the US dollar.
Trump's statement and PM Modi's appeal
Meanwhile, Iran has sent its response to the latest US ceasefire proposal through Pakistani mediators and wants the talks to focus on ending the war forever, Iranian state media said on Sunday. Trump rejected Iran's proposal to end the months-long war as "completely unacceptable", although he did not give any details. At the same time, a prominent Republican leader urged him to consider the “military option”. Amid the ongoing conflict in West Asia, PM Modi on Sunday appealed to the people of the country to adopt measures like using fuel wisely, purchasing gold and postponing foreign trips.
Situation from crude oil to stock market
- Meanwhile, the dollar index, which measures the dollar's strength against a basket of six currencies, was trading 0.13 per cent higher at 98.02.
- Global oil benchmark Brent crude rose 2.52 percent to $ 103.8 per barrel in futures trade.
- Talking about the domestic stock market, Sensex fell 1,312.91 points or 1.70 percent to 76,015.28, while Nifty fell 360.30 points or 1.49 percent to 23,815.85.
- According to exchange data, foreign institutional investors sold shares worth Rs 4,110.60 crore on Friday.
- RBI said on Friday that during the week ending May 1, India's foreign exchange reserves declined by $ 7.794 billion to $ 690.693 billion.
- In the previous reporting week (ending April 24), total reserves had declined by $4.82 billion to $698.487 billion.
What do experts say?
Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP, said that PM Modi has asked to reduce the purchase of petrol, gold, foreign trips etc. with the aim of saving foreign exchange to keep the fiscal deficit low. The short-term effect of these steps may appear in the form of slowing down of economic growth. He said that although Trump did not accept Iran's response to his peace proposals, this development pushed crude oil prices above $ 105 per barrel and the dollar index above 98, which maintained the demand for both... The rupee is expected to be between 94.75 and 95.50 on Tuesday.
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