Post by : Bianca
Haleem
The rupee's notable decline against the US dollar on Monday has stirred political tensions, with Congress bringing up Prime Minister Narendra Modi’s earlier comments regarding currency depreciation from a decade ago. The currency initially opened at 89.46 per dollar, later showing slight improvement at 89.17, mere days after hitting a three-year low.
On Friday, the rupee fell 98 paise, closing at a record low of 89.66, driven by intense demand for the US dollar and significant selling pressure across both domestic and global markets. Trade uncertainties and widespread risk aversion additionally pressured the currency, pushing it close to the critical 90 mark.
As markets opened this week, Congress general secretary Jairam Ramesh criticized the central government by stating on X that the rupee is in a “free fall” and nearing the low of 90 rupees against the USD. He also shared a 2013 video where Modi, then Gujarat's chief minister, ridiculed the UPA government during a similar currency crisis, stating it appeared there was a “competition” between the weakening rupee and the government’s “dignity”.
The latest currency trend adds to a challenging financial environment, as this 98 paise drop marks the most significant decline since February 24, 2022. Analysts point to global uncertainties and rising demand for dollars from importers as the primary reasons behind this ongoing slide, alongside continued sell-offs in domestic equity markets.
This political back-and-forth has further amplified the economic discourse, placing the rupee’s fluctuations squarely in the nation's focus as investors prepare for additional market changes.
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