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Indian rupee falls at all time low of 70.81, Petrol Price hiked again

Indian rupee falls at all time low of 70.81, Petrol Price hiked again
Written by Abhishek Lohia

Indian Rupee is falling steadily against the US dollar. On the other hand, the petrol prices hiked again. Both are two sides of the same coin. Indeed, the direct impact of the dollar’s strength is on petrol-diesel prices in the domestic market. This is the reason why Rupee, which looks like a drop in the face. At the same time, petrol and diesel price are booming in India. On Wednesday, after reaching record low levels, weakness in rupee was also seen on Thursday. At the same time, oil companies have hiked petrol prices by 18 paise today due to the rupee fall.

Indian Rupee falls at the lowest Level

The Indian rupee has reached the lowest level of 70.81 level against the dollar during the trade. After opening the currency market, the Indian rupee lost 18 paise. Earlier, the rupee started at the level of 70.63 with 4 paise weakness. At the same time, the rupee had closed 45 paise lower at 70.59 against the dollar on Wednesday. According to Nomura, in the next few weeks, the rupee can touch the feat of 72 and could be more weaken against the dollar, which would make it more expensive to buy crude.

DBS Economist Radhika Rao explained in a note following the previous record low on Wednesday, Oil prices have been up more than 7 percent since mid-August. “Markets get a sense that the authorities are tolerant of a weaker rupee, with little by way of jawboning or verbal intervention,” She added.

Increased demand for the dollar, political uncertainty, and signs of a rise in rates by the US Fed may lead to more rupee depreciation. This is the biggest fall of Rupee in a single day after August 2013. This year, the rupee has broken more than 10 per cent so far. According to the experts, the rupee fell by sales from the oil importers and foreign banks by the foreign banks.

Effect of Indian Rupee Falling against the US Dollar

Compared to the dollar, the rupee’s level crossing 70 will affect the import of crude. Now, Imports will have to pay a higher oil price. Because of this, oil companies could increase the prices of daily petrol and diesel. India imports more than 80 percent of its requirement of crude. In such a situation, due to rising dollar prices, they will have to pay a higher price for their import. Oil marketing companies can increase petrol-diesel prices if imports are expensive.

Effect of Indian Rupee Falling to IT Firms

IT, pharma automobile sector will be the biggest beneficiary of the dollar’s strengthening against the Indian rupee. The companies earning more than these sectors are the export base. In such a situation, the firm will have to firmly invest in the US market with IT companies like TCS, Infosys, Wipro. Apart from this, gas producers like ONGC, Reliance Industries, Oil India Ltd will benefit from the upturn in the dollar because these companies sell fuel in dollars.

About the author

Abhishek Lohia

Abhishek Lohia was a Sports and Political Writer working for Newsfolo and is no longer associated with the organization.

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