The Indian Rupee has weakened against the US Dollar and is hovering close to the record low recorded earlier in the month. The decline came after the Indian economy took a further blow from inflation data and the continuing rise in strength of the ‘Greenback’.
According to the Ministry of Commerce and Industry India’s main inflation gauge increased to 5.79% from the previous year. The figure is particularly troublesome for the country’s economy as the Reserve Bank of India said that it can only tolerate inflation up to 5% and warned that the faster pace of price rises will do harm to the economy.
The Ministry blamed the rise on the heavy rainfall that struck most of the parts of the country earlier in the year which destroyed crops and resulted in higher food prices. The Rupees continuing weakness is also playing its part in stoking inflation.
The Reserve Bank of India’s recent attempts to halt the currency’s decline has been met with derision by many economists who say that they do not go far enough.The nation’s huge current account shortfall is also dragging upon India.
“The stop-gap and lop-sided approach to address the structural current account shotfall is unlikely to provide relief for long. Any interim stabilisation in the Rupee and sentiments could give way as soon as the markets get wind of the insufficiency of these initiatives in the weeks ahead,” said Radhika Rao, an economist at DBS.
The Rupee is expected to remain close to the all time low level of 61.80 as economists expect the US economy to show further signs of improvement this week, which will increase speculation that the Federal Reserve will make a rate cut in September a move that will be detrimental to the Indian currency.
Current Rupee (INR) Exchange Rates:
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 94.9785 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 81.3587 >
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 61.3241 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 55.8056 >
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 48.9935 >
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 59.2259 >
(Correct as of 10:25 am GMT)
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