The Reserve Bank of India (RBI) has taken a big step to improve the deteriorating health of the rupee amid Russia's invasion of Ukraine. Given the large fluctuations in the exchange rate of the rupee, the Reserve Bank is expected to sell around $2 billion from its foreign exchange fund.
Due to the war between Russia and Ukraine, the pressure on crude oil prices in the international market has increased. Apart from this, there is an atmosphere of tension in the global market. In such a situation, the condition of the rupee has also weakened. India imports a large amount of crude oil, so due to change in the exchange rate with the dollar, the pressure on the domestic currency increased.
This weak position of the rupee, public and private banks have sold dollars in the spot market on behalf of RBI. To handle the falling rupee, RBI buys dollars, so that crude oil imports Its impact on the companies involved can be reduced. In the international market, Brent crude oil had reached the level of $ 112 per barrel on Wednesday. This is the highest level of crude oil in the last eight years. India imports 80% of its crude oil requirement. This transaction is done in dollars. Apart from this, the effect of the dollar being expensive against the rupee affects the expenses of Indian students studying abroad, the expenses incurred on traveling abroad and the import of cooking oil.