Rupee falls, the RBI and the government are helpless?
The decline in the rupee against the dollar is a strange muddle. Economic experts believe that in such a situation, the effort will be to save the rupee, the rupee will be trapped in this quagmire. A strength of money is a continuous process and it is the responsibility of the government …
In the international currency market, the rupee depreciates against the dollar continuously. Rupee surpasses 72 levels against the dollar on Thursday. The experts claim that this decline in rupees is being seen due to global reasons.
Why is the rupee falling?
The trade war between the US and China and the increasing global dependence on the global level, therefore, is the biggest reason for this decline. Because of this trade war at the global level, the world’s confidence in the dollar is steadily rising and the dollar is going to be fiercely purchased. On the other hand, currencies of emerging markets have suffered losses worldwide.
The experts also say that the decline in Turkey’s currency lira, where there is a crisis for Europe’s currencies, the decline in Europe’s currencies have plunged the crisis in emerging economies. Apart from this, the continued rise in the prices of crude oil globally is also presenting a serious challenge for the posture of these economies.
What damage to the common man?
The price of rupee in the global market directly affects the common man. In very simple words, if this effect is said, everything in the market starts to be expensive. The fall in the price of rupees makes it expensive for the common man to celebrate holidays abroad, buy foreign cars, buy smartphones and study abroad. This leads to knocking the price in the country. The products of everyday needs seem to be expensive. You can say that the constant weakening of rupees against the dollar makes the bread, cloth, and house expensive for the common man.
At the same time, the impact of the rupee weakness on the home loan becomes more expensive for the common man. Therefore, it is clear that when there is a continuous decline in rupee against the dollar, then this time it is not about taking a new home loan. Apart from this, the import of the country becomes costly due to the weak rupee. At a time when crude oil prices are already running at the top level, the weaker rupee puts more burden on the public exchequer and the current account deficit of the government increases.
RBI has no option?
The common perception is that with the printing of rupees, the Reserve Bank has an important role in making the rupee trade in the global currency market. Given the current rupee depreciation against the dollar, Anshuman Tiwari, editor of INDIA TODAY Hindi, says that the Reserve Bank has no choice but to handle the rupee move. Anshuman said that the current situation is also perennial because now even if the Reserve Bank takes some steps to save the rupee, it will not be successful as the rupee is completely embroiled in the global situation, which means that we have no control over the RBI or the government. is.
Some traders of the currency market also confirm this. According to media reports, after falling to the level of 71.95 per dollar on Wednesday, the Central Reserve Bank spent about 1.5-2 billion dollars with its foreign exchange reserves to handle the rupee. But this step did not work even on Thursday morning. After opening with a little stronger rupee than the dollar on Thursday, the rupee went down below the psychological level of 72 and the central bank’s stance was strained.
Who is responsible for beating the rupees?
A country’s currency explains the health of its economy. Economic thinkers believe that the biggest responsibility of governing the currency is that of the government of that country. At the same time, Rajeev Dubey, editor of Business Today, says that the central government will have to increase FDI and FPI along with increasing the exports in the country to avoid such a situation.
According to Dube, this work is done in the current situation, but not during a long period. If there is no economic slowdown in the country, the rupee is not getting caught in this situation compared to the dollar. Therefore, in order to remove the rupee from the current situation, there is a need for big foreign direct investment (FDI) and foreign portfolio investment in the country along with a big increase in exports. Rajeev believes that if the government had done better during the last few years on these three front, the rupees would not have been in the current situation.