Rupee A Hop, Skip And Jump Away From 80 A Dollar In Dramatic Collapse

The rupee is just a hop, skip and jump away from 80 per dollar, underscoring a dramatic collapse this year.

The rupee is just a hop, skip and jump away from 80 per dollar, underscoring a dramatic collapse this year in a journey which includes a breach of several key psychological levels.

That is something none expected, even in their wildest predictions at the start of 2022, when the Indian currency was trading around 74 against the greenback.

The news flow in recent months has read that the rupee hits a new all-time low almost every other day. 

While the hit to the Indian currency has been lower than its peers, the impact on the broader economy from the rupee’s plunge has its pitfalls.

The notion that the Russia-Ukraine war has driven the changing landscape in global financial markets is partially true.

The development of foreign investor exodus from emerging markets and into dollar-denominated assets began once the US Federal Reserve openly acknowledged that they misjudged surging price pressures as ‘transitory’ and were behind the curve on controlling inflation at the turn of 2022.

But much of the accelerated impact has come since Russia invaded Ukraine late in February, with the rupee breaching the 77 per dollar mark for the first time ever, and the journey of its collapse since has been nothing less than dramatic.

From the 77 against the dollar to 78 and then to 79 has been swift in foreign exchange markets’ terms, with the 80 per greenback rate not too far away.

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