Rupee Fallen / Tension is constantly increasing in the Middle East, why has the value of rupee fallen

In Asia, except India, the currencies of other countries strengthened against the dollar, but the rupee appeared weak. According to experts, the increasing tension in the Middle East and the increase in the price of crude oil are the main reasons. The increasing demand for the dollar has also increased the pressure on the rupee.

Rupee Fallen: The currencies of most Asian countries are showing strength against the dollar, but the Indian rupee seems to be under pressure. According to experts, the main reason for this fall is the ongoing geopolitical tension in the Middle East, which has led to an increase in crude oil prices. Along with this, the increasing demand for dollars and the continuous outflow of foreign investors have also had a negative impact on the rupee.

Demand for crude oil and dollar remains the main challenge

In the last few days, due to tensions in the Gulf countries, the prices of Brent crude have risen, which is natural to put pressure on the currency of an import-dependent country like India. In the international market, Brent crude oil has gained 1.04% to reach $ 66.06 per barrel. Along with this, the increase in demand for dollars from importers and foreign banks has made the situation more difficult.

Rupee remained in a limited range, fell for the second consecutive day

On Wednesday, the rupee opened at 85.65 in the Interbank Foreign Currency Exchange. During the day's trading, it reached a high of 85.53 and a low of 85.70. Finally, it closed at 85.59 with a marginal decline of 1 paisa. A day earlier on Tuesday, the rupee had closed 16 paise lower at 85.58. Thus, a total decline of 17 paise has been recorded in two days.

Effect of foreign investment and US Treasury yield

The rise in US Treasury yield and continued withdrawal of foreign funds has also increased the pressure on the rupee. However, the strength of the domestic stock market and weakness in the US dollar index partially balanced the decline. The BSE Sensex closed 410.19 points higher at 81,596.63, while the Nifty gained 129.55 points to reach 24,813.45.

Experts' opinion: What next?

Anuj Chaudhary, Research Analyst at Mirae Asset Sharekhan, believes that the rupee may remain under pressure in the coming days due to the situation in the Middle East and the dollar demand from importers. However, if the risk-taking tendency in the global market increases and the fear of trade war reduces, it may provide some support to the Indian rupee. Chaudhary estimates that the rupee may remain in the range of 85.40 to 86.00 against the dollar.