Rupee falls: As the rupee slipped further, economist Kaushik Basu issued a cautionary message – the fall is not just because of the war. He said this is not the time for politics anymore.
“It’s time to move away from politics to actual policy. The Indian rupee lost 11.2% vis-a-vis the US$ over last year. This is not just because of war. Net foreign direct investment to India has been near 0 over 22 months. Left unchecked, this will cause inflation to rise,” he said.
The rupee fell to an all-time low of 96.25 against the US dollar in early trade on Monday. It opened weak due to elevated crude oil prices, global uncertainty and a stronger dollar. At the interbank foreign exchange market, the rupee opened at 96.19 and slipped further to 96.25, down 44 paise from its previous close.
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The dollar index, which measures the greenback’s strength against a basket of six currencies, was trading at 99.32, up 0.04 per cent due to simmering Iran tensions. Brent crude, the global oil benchmark, was trading 1.83 per cent higher at USD 111.26 per barrel in futures trade.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said, “Only stoppage of war and reopening of the Strait of Hormuz can bring about a lower demand on the $/rupee pair, else 100 seems to be on the card if RBI does not announce any schemes to increase dollar inflow into the country.”
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Rupee’s fall comes even as a report by BMI, a unit of Fitch Solutions, said that rupee is expected to trade broadly sideways and end 2026 at around 95 per US dollar.
