Rupee Decline Analysis / These five enemies are injuring the rupee and have caused so much damage

Rupee Decline Analysis: In the last few days, the Indian rupee has been under constant pressure against the dollar. On Thursday, during trading, the rupee fell by 24 paise to 85.93 per dollar. This decline is not accidental, but there are five major reasons behind it, which can be called the "five enemies" of the rupee.

Five major reasons for the fall in the rupee

Trump's tariff policy

The strength of the dollar has increased after former US President Donald Trump announced a 25% duty on imported vehicles. Due to this tariff policy, the shares of the Indian auto sector have come under pressure, which is also affecting the rupee.

Rise in the dollar index

In recent days, the dollar index has registered a rise of 1.5% to 2%. Earlier it had gone below the level of 103, but now it is trading at the level of 104.50. The strength of the dollar index is putting pressure on the Indian currency.

Rise in crude oil prices

The rise in crude oil prices in the global market remains a challenge for the Indian economy. Oil prices have risen by more than 5% since March, increasing India's trade deficit and weakening the rupee.

Rising demand for dollar

The demand for dollars usually increases at the end of the financial year, as companies buy more dollars for their financial adjustments. This is having a negative impact on the rupee.

Lack of liquidity

There is a shortage of cash in the Indian currency market, due to which there is constant pressure on the rupee. Experts believe that if the liquidity problem persists, the rupee may fall further in the near future.

Current market situation

The rupee opened at 85.90 in the Interbank Foreign Currency Exchange Market and fell to 85.93 per dollar. In the previous session, it closed at 85.69. According to Amit Pabari, MD, CR Forex Advisors, given the current market conditions, the rupee may get support at the level of 85.40-85.50 against the US dollar, but it can also go up to the level of 86.50.

Can the situation improve further?

However, investment by foreign investors can support the rupee at lower levels. On Wednesday, foreign institutional investors (FIIs) bought shares worth Rs 2,240.55 crore, which brought some stability to the market.

Meanwhile, the dollar index fell 0.22% to 104.32, while Brent crude is trading at $ 73.88 per barrel in the international market. Positive trend was also seen in the Indian stock market, where the Sensex rose 284.21 points to 77,572.71 and the Nifty rose 73.50 points to 23,560.35.