Why has the Indian Rupee fallen so much against the US dollar? | What effect can it have on your pocket?

Why has the Indian Rupee fallen so much against the dollar?

You must know that the Indian rupee has become more than ₹ 80 against a dollar. A dollar is currently running for ₹ 80 and this has happened for the first time. You must be hearing and reading a lot of news about the rupee nowadays. This is also happening because for the first time in history. The Indian rupee had crossed 80 against the US dollar. This means that the purchasing power of the rupee has decreased against the dollar.
 
The fall of your rupee is not only a matter of economists but also of the common man. When it comes to the fall of the rupee, there is only politics on it. Politicians use it against the current government and or else it is considered a matter of economists. A common man has no idea about it. Now after this, the question is being raised continuously what message does the weakening of the rupee against the US dollar give to the country's economy.
 
After all, why does the rupee fall and what does it mean to weaken the rupee? Is the weak rupee weakening India on the economic front as well and is this historic fall in the rupee going to cause a big explosion of inflation. The first thing is that the economies of the world have suffered the biggest setback due to the Ukraine war and this is happening all over the world. But the thing to understand for you is that due to this war almost all the countries of the world have suffered.
 
The currency has weakened, but there are two countries whose currency is getting stronger after this war and these two countries are the ones who are responsible for this Ukraine war. One of these is the Russian ruble, which has gained 34% since January 2022. You will remember when the war started people were saying that the Russian currency ruble will weaken now, but Russia benefited and the ruble has strengthened by 34%.
 
And the other currency which is continuously getting stronger is the US Dollar is getting stronger continuously. While the currency of most other countries are weakening, including India's rupee, in our country, the falling level of the rupee has been made a political issue and only the
The government is being blamed for it.
 
But you will be surprised to know that the rupee has fallen after the Ukraine war, but it is not the only one to fall. There are many countries whose currency is falling faster than the rupee. The Indian rupee has depreciated nearly 7.02% since January 2022. While the British pound fell by about 13%. The euro has fallen by more than 11%, and Japan's currency yen has lost 19% within seven months. Whereas currency from China to South Africa has also declined by 5 to 6%.
 
So you imagine China's currency is falling, Japan's currency is falling, Britain's currency is falling and Europe's currency is also falling. There are only two currencies that are not falling, they are Russia and the US and both are mainly responsible for this war. That's why it is said many times that war is an industry and big superpowers, gain more profit from war and less damage.
 
Now understand why the rupee is falling? America is increasing interest rates very fast to control the rising inflation in their country. There this year interest rates have increased by 1%. So far, the US dollar is getting the benefit of this and along with the rupee, the currency around the world is weakening. A major reason for the fall of the rupee is the Ukraine war.

What effect can it have on your pocket?

Due to the war, the prices of products like oil, wheat, and fertilizers increased because their supplies from Russia and Ukraine are now reduced due to the war. When supply is low, then demand increases, and when demand increases, its value also increases. Another reason is the increase in the price of crude oil in the international market. India imports 80% of its oil requirement. 

Which is a purchase from other countries. The payments we make for imports are made in US dollars, which leads to a shortage of dollars within the country. And the US dollar goes up. For example, whatever crude oil India buys in the international market, its full payment is done in dollars only. 

Now suppose India's ₹70 is equal to one dollar and the price of crude oil per barrel in the international market is $10, then India will have to pay ₹700 for one barrel of crude oil. But if the rupee weakens further against the dollar and its price goes beyond ₹ 80, then India will have to pay ₹ 800 for this one barrel of crude oil. If the prices of the crude oil change, and due to the weakening of the rupee, India will have to spend more on the import of crude oil.

 
The fourth reason is that many foreign investors have reduced their investments in India. According to an estimate, foreign portfolio investors pulled out around ₹ 2320 billion from the Indian markets in the last six months, which has weakened the rupee. If the rupee is falling then there are many reasons for this, but what effect can it have on your pocket.
 
Because the rupee is falling and most people understand that it is the headache of the economists or the headache of the government, what should we take from it? But it will also affect your life. Now see, after the fall of the rupee, now importing goods from abroad will become expensive, because it has to be paid in dollars. Whatever goods we are buying from outside or from other countries, we pay for all those goods mostly in dollars and all that will become expensive. This process is also called currency depreciation.
 
The weakening of the rupee will have an impact on the oil and energy products being imported from abroad. Petrol diesel will become expensive and you know as soon as petrol and diesel become expensive in our country, everything becomes expensive because the cost of anything increases with the transportation cost. Whether it is vegetables or other things when the value of the rupee depreciates.
 
The foreign travel you take will become expensive and students who go to study abroad will now have to pay more. But just like every coin has two sides. Similarly, if there are disadvantages to the falling rupee, then there are also some advantages. A weak rupee will increase India's export potential. For the product on which exporters were getting ₹74 earlier, they will now get a value of ₹80.
 
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