Winning Bizness Desk
Mumbai. Amidst the ongoing war between Israel and Hamas, the Indian currency Rupee has closed at historic lows against the dollar, besides crude oil prices again reaching above 90 dollars per barrel. Other Asian currencies also saw declines against the dollar. The Indian rupee closed at Rs 83.27 against the dollar, while on September 18, 2023, the rupee had closed at 83.26. According to a report, RBI is selling dollars in the market which has saved the domestic currency from falling. Public sector banks sold dollars on behalf of the RBI when the rupee fell to 83.28 against the dollar at the close of currency market trading.
According to the market experts, the Indian currency could depreciate to Rs 83.50 against the dollar. He said the dollar supply from the central bank kept the rupee strong last week. The rupee was supported by a reduction in fiscal deficit and lower inflation. Rising crude oil prices will put pressure on the rupee. Experts are of the view that if the rupee breaks the 83.50 level, it can move towards the 83.80 level. Notably, India imports 80 percent of its crude oil consumption and therefore, Indian oil companies will have to pay more for imports if the rupee weakens and the dollar appreciates along with the rise in crude oil prices.
What if the rupee weakens further?
India is one of the major importers of gold. The festive season is around the corner and most of the countrymen buy gold during Navratri, Dhanteras and Diwali. If a strong dollar makes gold imports more expensive, domestic gold prices may rise. In such a situation, the pocket has to be emptied more to buy gold during the festive season.