The Indian rupee moved to a new record of fall of Rs. 74.06 around 6 P.M., on Monday. The domestic currency has been falling repeatedly, with the last fall being Rs. 73.76 on Friday. Many analysts have predicted the fall will continue.
The reason cited behind the free fall is the steady demand of dollars from banks and importers’ and oil refineries’ rise in crude oil price. The frequent fall of the Indian currency has given a state of depreciation to the Bar Stock Exchange’s (BSE) Sensex market. Another reason for the fall of the Indian rupee against the U.S. dollar is the trade war between the U.S. and China. The China Central Bank will be cutting the reserve requirement ratios (RRRs) by 1 % from the 15th of October, adding a net amount of $ 109.2 billion into the banking system.
BSE’s benchmark index Sensex is harshly affected by the depreciation. Today, around 10:30 A.M., it opened at 34,448 points, whereas the National Stock Exchange’s (NSE) Nifty opened at a low of 10,303 points.
The Indian market is suffering a huge amount of loss due to the depreciation in the value of the rupee. The Reserve Bank of India‘s (RBI) rates announced in a recent monetary meet have also been a real shock to the economy of the country. RBI announced the repo rate (money lending rate) and the reverse repo rate (money borrowing rate) will remain constant at 6.50 % and 6.25 % respectively.