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Dollar Update: Even in the coming days, if foreign investment does not return and the demand for dollar remains like this, then the rupee can go down further.
Dollar Update: The Indian rupee fell 18 paise to 86.88 against the US dollar in early trade on Tuesday. It is close to the lowest level of this month. This pressure on the rupee increased due to many reasons, such as withdrawal of foreign capital, increasing demand for dollars and weak performance of domestic market. Experts believe that this decline may deepen in the coming days.
Investors disturbed condition
According to Forex experts, there is a continuous demand for dollars from importers, which has increased the pressure on the rupee. Importing companies need dollars for international payment, and when this demand increases, the price of the rupee starts falling down. Along with this, foreign investors are also withdrawing their capital from the Indian market, which has caused more shock to the rupee. This double kill is not allowing the rupee to be careful.
Foreign capital drift became the reason for concern
Foreign institutional investors (FIIs) sold equity of ₹ 6,082 crore on Monday itself, which was one of the major reasons for the rupee fall. Whenever big investors withdraw money from the Indian market, the demand for the dollar increases and the price of the rupee goes down. There is an atmosphere of uncertainty in the market at this time, due to which investors have become cautious and are turning to safe options.
RBI’s limited interference, but keeping an eye on
The Reserve Bank of India (RBI) sometimes interfere in the market to protect the rupee from falling completely, but experts say that RBI is currently allowing the rupee to fall slowly. This strategy has been adopted so that foreign investors do not feel that the currency is being artificially strong. However, if the speed of the decline is faster, then the RBI and aggressive intervention can be done.
No relief from global factor
On Tuesday, domestic stock markets recorded a slight increase, but it could not handle the money. The Sensex closed up 51 points and the Nifty closed up by 18 points, but this strength did not affect the rupee. At the same time, the internationally Brent crude oil remained stable at $ 70.07 per barrel and the dollar remained strong, leading to support for the US dollar and kept pressure on the rupee.
The main reason for the fall in the rupee is increasing demand for dollar, selling foreign investors and weak support from the stock market. Even in the coming days, if foreign investment does not return and the demand for dollar remains like this, then the rupee can go down further. Experts are currently expected to fall by 86.90.
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