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The price of Indian Rupee has seen the biggest fall today i.e. on March 30. The rupee has weakened by 88 paise to 95.58 per dollar against the US dollar. The rupee has fallen for the third consecutive day due to the ongoing US-Israel war with Iran and the rise in crude oil prices.
This will also affect the common man’s pocket. Buying goods imported from abroad including mobile phones, gold and silver will be expensive.
The rupee fell by about 4% in a month, while it has fallen by more than 11% in FY 2025-26. This is the biggest decline in the last 14 years. According to foreign brokerage firm Bernstein, the rupee may go up to 98 if the Iran war continues.
Although the Reserve Bank of India (RBI) tried to control the forex position limit of banks by increasing the forex position limit of banks to Rs 100, its effect was short-lived in the market due to continuous selling by foreign investors.
Understand the impact of rupee fall in 9 questions and answers…
Question 1: What is the biggest reason for this historic fall in the rupee?
answer: The biggest reason for this is the rise in crude oil prices. After Iran’s attacks on the energy bases of Gulf countries, the prices of Brent crude had crossed $ 110 per barrel. India imports 85% of its oil needs, for which we have to pay in dollars. Due to oil becoming expensive, the demand for dollars increased and the rupee became weak.
Question 2: What is the role of foreign investors (FIIs) in this?
answer: Foreign portfolio investors have so far withdrawn approximately $ 12.3 billion (about Rs 1.15 lakh crore) from the Indian stock market in the month of March. Due to global uncertainty and fear of war, foreign investors are pulling their money out of emerging markets like India and investing it in safe havens like US bonds. Due to such heavy selling, the pressure on the rupee has increased a lot.
Question 3: What does the ‘Strait of Hormuz’ tension have to do with the rupee?
answer: The Strait of Hormuz is the sea route through which 20% of the world’s oil and almost half of India’s oil passes. Due to increasing tension between Iran and Israel, there is a fear of supply disruption on this route. Market experts say that until the situation on this sea route becomes clear, the rupee will continue to fluctuate.
Question 4: Is the Reserve Bank doing anything to stop this decline?
answer: Yes, RBI is continuously interfering in the foreign exchange market. The bank tries to arrest the fall of the rupee by selling dollars from its foreign exchange reserves.
Question 5: Will this also affect the country’s GDP growth?
answer: Absolutely. Economists have warned that high energy prices could reduce India’s growth rate. Continuous increase in energy prices will increase inflation and harm India’s growth. It will also be difficult to cut interest rates.
Question 6: How will the weakening of the rupee affect the common man’s pocket?
answer: Due to weakening of rupee, imports will become expensive for India. More money will have to be paid for things like crude oil. Apart from this, electronic goods like mobiles, laptops imported from abroad will also be expensive. Studying abroad will become expensive.
Question 7: Does anyone benefit from the fall of the rupee?
answer: Yes, exporters benefit from weak rupee. Companies in the IT sector, pharma and textile industries get paid in dollars for their services or products. When they convert those dollars into rupees, they get more rupees than before.
Question 8. How might the rupee move in the coming days?
answer: Market experts believe that as long as crude oil prices remain above $110-115 and selling by foreign investors continues, the rupee will remain weak. If global sentiment does not improve, rupee may even touch 98 level.
Question 9: How is the value of currency determined?
answer: The price of any country’s currency is mainly decided on the basis of its ‘demand and supply’ in the international market. If India has to import more goods like crude oil from abroad, then more dollars will be required for payment. As the demand for dollar increases, it will become expensive and the rupee will fall.
Apart from this, the country’s inflation rate, interest rates and confidence of foreign investors also decide the value of the currency. If interest rates in India are good and the economy is stable, then foreign investors will bring dollars here, which will increase the supply of dollars and strengthen the rupee. In simple words, the higher the demand and lower availability of the currency in the world, the higher will be its price.
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Read this news also…
Banks will not be able to keep more than 100-million dollars with themselves: RBI’s instructions to stop the continuous fall in rupee, this will make foreign goods cheaper.
RBI has directed that banks will no longer be able to keep more than 100 million dollars (about Rs 950 crore) with themselves every day. Earlier, banks were holding 300 to 500 million dollars (Rs 2,845-4,743 crore) every day.
According to Forex analysts, the effect of the instruction will be that banks will now sell the extra dollars they have in the market, which will strengthen the rupee. Due to which buying foreign goods, studying and traveling abroad can become cheaper.
Apart from this, electronics products like mobile, laptop can also become cheaper. A day before RBI issued this instruction, the rupee has reached an all-time low of ₹ 94.59 against the dollar. Read the full news…
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