Will the decline of the rupee continue? will fall to 82 against the dollar,economists expressed fear
Rupee fall: The Indian rupee is likely to depreciate to 82 against the dollar in the near term as the trade deficit widens and the aggressive rate hike expected by the US Federal Reserve later this week to stem record high inflation.
Inflation around the world has affected the currencies of many countries. The rupee has also been witnessing significant fluctuations for the past few days. Economists fear the rupee will fall to 82 against the US dollar shortly. A widening trade deficit and the prospect of a rate hike by the US Federal Reserve this week to curb inflation will also fuel the situation, the economists said.
The Federal Reserve's meeting, the United States's central bank, is next Tuesday. The Federal Reserve may raise interest rates by 0.50 to 0.75 percent in this two-day meeting to control US inflation. If this happens, foreign investment from countries like India will likely return to America. Thus, if the dollar goes back home and crude oil prices rise in the international oil market, the rupee may depreciate further. Last week, the rupee had hit a one-session low of Rs 80.6 paise against the US dollar.
Amit Kumar Ghosh, Research scholar of Economics and Chief Editor of Worldopress, said that the rupee would generally remain at 79. The rupee will remain around this level throughout the financial year. But given the depreciating trend of the rupee and the unstable political situation, the rupee may drop to 81. According to Nomura, the rupee could hit 82 in the July-September quarter.