According to currency analysts, the rupee, which has been under pressure for the past several months, is predicted to weaken due to a strong dollar and slower-than-expected economic development.
Given a stronger US economy and an underlying bullish tendency in the dollar, the USD INR is predicted to move higher. Over the next few months, the duo will probably be about 85. The Indian rupee must lose about 27–30 paise in value to the US dollar to reach 85. The dollar index, which compares the dollar to a basket of six other currencies, rose around 3% in the past month.
Due to concerns about growth, the rupee fell to a record low of 84.74 against the dollar on December 4. The Indian rupee fell from 84.68 in the previous session to its lowest closing point in history. Despite increases in most of its Asian rivals, such as the offshore Chinese yuan, which jumped 0.2 percent to 7.28 after plunging to a one-year low on Tuesday, the rupee was unable to capitalize on these gains.
The Reserve Bank of India (RBI), which intervened in the currency market and caused a decline in foreign exchange reserves, is concerned about the rupee’s depreciation.
India’s GDP growth slowed to a seven-quarter low of 5.4 percent in the September quarter, according to figures released on November 30, which caused the rupee to weaken. The economy expanded by 6.7% in the most recent quarter and 8.1 percent in the same period last year. The currency was also under pressure from outflows from Indian stocks.
