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Indian Rupee has Fallen Below 83 Against US Dollar Again
The Indian rupee has fallen below 83 against the US dollar again. As of today, September 6, 2023, the rupee is trading at 83.04 against the dollar. This is the fifth time since August 14 that the rupee has breached the 83 level.
There are a few factors that are contributing to the weakness of the rupee. One is the rising US dollar index, which dealings the strength of the US currency against a basket of six other currencies. The US dollar index has been rising in recent weeks due to several factors, including the hawkish stance of the US Federal Reserve and the ongoing war in Ukraine.
Another factor weighing on the rupee is the weakness of the Chinese yuan. The yuan has been falling recently due to concerns about the Chinese economy. As the yuan falls, imports from China are more expensive for India, which puts downward pressure on the rupee.
Finally, the rising crude oil prices are also putting pressure on the rupee. India is a major trader of crude oil, and the rising prices are pushing up the country’s import bill. This is also putting downward pressure on the rupee.
The RBI has been overriding in the foreign exchange market to prevent the rupee from falling too sharply. However, the RBI’s interventions have been limited, and the rupee has continued to fall.
It is difficult to say how long the rupee will remain weak. The factors currently weighing on the rupee will likely last to do so soon. However, the rupee could strengthen if the US dollar index starts to fall or the Chinese yuan starts to appreciate.