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Is the rupee heading back into the abyss? In the foreign exchange market on Wednesday, the rupee fell by 5 paise to 83.09 against the US dollar in early trade. This is the sixth time in 21 days that the rupee has crossed 83. Earlier, the rupee closed down 35 paise at 83.06 (provisional) against the US dollar. The rise in crude oil prices and the strengthening of the American currency had an impact on the rupee. Withdrawal of foreign funds also affected the rupee sentiment. The rupee has crossed the 83 level for the sixth time since August 14. The rupee closed at 82.71 against the US dollar in the last trading session.
Dollar near 6-month high
The US dollar hit its highest level in nearly six months against other currencies on Tuesday, buoyed by safe-haven demand. The US dollar index rose 0.62% to 104.8. The index touched a near 6-month high of 104.85 earlier in the session. The dollar hit a 10-month high of 147.8 yen, Reuters reported.
Also Read: A weak rupee will ruin your household budget, the Indian currency crosses 83 against the dollar
What will be the effect?
India imports large quantities of edible oil and pulses. As the dollar appreciates, we will have to spend more on oil and pulses, which will affect their prices. In such a situation, your kitchen budget may be ruined due to being expensive. Apart from this, studying abroad, travel, pulses, edible oil, crude oil, computers, laptops, gold, medicines, chemicals, fertilizers and heavy machinery which are imported can be expensive.