The rupee continues to depreciate against dollar:
The tumbling rupee demonstrates that it is more spineless than ever when compared to the soaring US dollar as the latter is persistent in maintaining its upward trajectory with its most recent appreciation of Rs1.18 on Tuesday in interbank trading.
According to the money dealers, the US dollar made a significant gain during today’s morning trading, rising by Rs1.18 to trade at Rs231 around 10:20am in the interbank market.
The forex association said, “In the meantime, currency dealers at the open market continued to sell local currency at Rs236 to Rs238 for one dollar.”
In the last seven working days, the rupee has dropped 5.13 percent (or Rs11.22) in value against the reported figure of Rs218.6 on August 1, 2022. On July 28, 2022, the currency experienced its all-time low, which was Rs239.94.
The US dollar also fluctuated and closed the day at Rs229.82, gaining Rs1.64 in value. On Monday, the open market rate for the dollar was Rs236, up Rs1.5 on the first day of the week.
Despite receiving the $1.166 billion blocked IMF tranche last month, the value of the local currency has been dropping, which shows that the market still lacks trust in the rupee.
As there is a higher demand for the greenback after the government scrapped the ban imposed on the import of luxury goods.
The rise in imports, remittances and exports did not increase to the required amount, thus, causing a disruption in the supply-demand position of the dollar.
Several factors including dismal macros owing to large-scale destruction by recent floods, extremely high ratio of inflation and increasing political noise are putting adverse pressure on the rupee.