Under Pressure
As the Indian rupee reached a record low of 87.58 to the dollar on Thursday, it finds itself at a critical juncture, navigating a sea of global and domestic pressures.
As the Indian rupee reached a record low of 87.58 to the dollar on Thursday, it finds itself at a critical juncture, navigating a sea of global and domestic pressures.
Notably, the rupee dropped to 85.0650 against the US dollar in early trade, compared to 84.9525 on Wednesday.
The Indian rupee’s surge to a two-month high on Thursday signals a broader shift in the global economic landscape, influenced not just by domestic factors but by international dynamics as well.
The minister said that a stable economy will propel India to become one of the top 3 economies in the world.
It is not just Western sanctions on Russia that accelerated the trend to circumvent the dollar, but the strength of the currency in the past year has also posed a challenge.
India's software export revenue and remittances act as a strong counter-cyclical buffer against the increase in current account deficit (CAD) due to a hike in global oil prices and rupee depreciation, said the State Bank of India's (SBI) Chief Economic Adviser.
The government has allowed international trade settlements in Indian rupees for export promotion schemes under the foreign trade policy.
The rupee on Monday ended 31 paise lower at 82.78 at the interbank foreign exchange market. The Indian currency opened 10 paise higher at 82.57 on the support of easing crude oil prices and touched a high of 83.01 during intraday trade.
"Indian economic performance in the first half of 2022-23 has been impressive compared to the world. As measured by PMI composite index, the economic activity level was higher for India at 56.7 compared to 51.0 for the World level during April-Sept 2022," said the economic review which was released on Saturday by the Finance Ministry.
India's foreign exchange reserves during the week that ended on October 14 fell to an over two-year low of USD 528.367 billion, a drop of USD 4.5 billion from the previous week.
