The Indian rupee on Tuesday, July 19, 2022, hit an all-time low of ₹80 against the US dollar for the first time. At the beginning of the day, the local currency was at ₹79.98 per US dollar whereas, it was previously closed at ₹79.97. Then, in the earlier trading hours, it suddenly hit a record low of 80.01.
As per the statement of Finance Minister Nirmala Sitharaman, global factors such as the sky-high price of crude oil, the Russia-Ukraine war, and sluggish global financial conditions are the repercussions behind the slumping Indian currency in the history of the financial world. It is also said by the finance ministry that global currencies such as the British pound, Japanese yen, and Euro have depleted even more than the rupee depicting that the Indian rupee rises against the above-mentioned currencies in 2022.
She added in her statement that the outflow of foreign portfolio capital is one of the critical reasons for the falling Indian rupee because in 2022-23 approx $14 billion had already been withdrawn till now from Indian share markets by the foreign portfolio investors.
This year the rupee recorded a nearly 7% fall against the US dollar due to the increasing trade deficit, continuous outflow of foreign portfolio investors, and soaring crude oil prices kept the rupee under strain for a while.
According to the Reserve Bank of India (RBI), the exchange rate in 2014 was Rs 63.33 to a dollar. In July 2022, it gravitated to Rs 79.41 per dollar.
One of the well-known portfolio managers, Asheesh chanda said that it is high time for Indian investors to invest in the US markets as the Indian currency is probably expected to decline.
Jateen Trivedi who is a VP Research Analyst made a statement stating that- “The lack of intervention from RBI could also weigh on sentiments on rupee weakness. Rupee weakness can continue till the time it trades below 79.25 in short term basis towards 80.50-80.75 zone. Dollar index staying above 105 also keeps added pressure on rupee. Further crude prices action along with FII’s inflow outflows shall also give cues to rupee moves."