Why The Rupees Is Falling Like Crazy

It seems like every day the Rupee is hitting a new low against the Dollar, currently a $1 = Rs. 78.10.Due to the fall, you'll get 6% less USD for the same amount of Rupees compared to last year

So let's explore the reasons as to why this is happening. While reading, just keep in mind that when people sell something a lot, its value falls As they needed Rupees to invest in India, they bought a lot of it and subsequently, it rose in value against the USD.

But now the govts. have started to increase rates to curb the rampant inflation This meant that institutional investors now had excess money. And when they have extra money, they take risks and invest in emerging markets.

Foreign Institutional Investors When the pandemic struck, govts. around the world started decreasing interest rates and printing money to curb a potential recession in their countries

And when govts. do this, Fils scurry out of emerging markets back to safer ones. So, as Fils exit India, they sell Rupees to get back their Dollars, which causes it to fall in value

Oil PricesAlso, as crude oil is steadily increasing in price, the Indian govt. has had to sell more and more Rupees to buy it. This has again caused the Rupee to fall further

One thing to note is, due to these reasons, almost all global currencies are falling against the Dollar. So you don't need to panic and think that there's a deep-rooted problem in the Indian economy