The Indian Rupee closed at an all-time low of 83.33 against the US Dollar, marking a significant decline of 9 paise. This drop can be attributed to the increase in the US Treasury yields and the weakness of the Rupee compared to other Asian currencies. In October last year, the Rupee had closed at 83.29 against the Dollar, which was also an all-time low.
Foreign investors in the stock market have been consistently selling, and the global political crisis due to the Israel-Hamas conflict has deepened, causing a surge in commodity prices. Crude oil prices have also been affected, leading to the Rupee’s depreciation against the Dollar. In October, foreign portfolio investors sold ₹25,575 crore worth of Indian equities.
On Wednesday, in the currency exchange market, the Rupee opened at 83.26 and weakened to 83.35, closing at an unprecedented level of 83.33 against the Dollar. On Tuesday, October 31, 2023, the Rupee had closed at 83.24 against the Dollar.
The continued depreciation of the Rupee against the Dollar could lead to increased import costs for India. Government-owned petroleum companies may have to spend more on importing petroleum products, and the import of electronics items could also become expensive. India imports a wide range of products, from cooking oil to pulses, and these imports may become costlier.
India is currently in the midst of the festive season, which sees a high demand for gold. India relies heavily on importing gold for consumption. With the strength of the Dollar and the weakness of the Rupee, importing gold could become more expensive, potentially impacting festive demand.