The value of the rupees continues to fall. There seems to be no end in that chute, which only reminds one of the sliding of Greek mythological character, Icarus who drowns in the sea after his waxen wings melt. The rupee, however, does not have waxen wings. It was on solid footing before 2014 when a slight decrease in its value attracted severe criticism from the media and from the former chief minister of Gujarat Narendra Modi who is now the Prime Minister of India. The media as well as the present government has so far kept mum over the issue; but whenever they have spoken about it, they just defended the decline in the value of the rupee against the dollar.
The rupee hit the record low of 82.20 against the dollar on Friday. This happened amid sustained increase in crude oil prices after the top producers agreed to trip output by two million barrels a month, which actually led to the decline in the value of the rupee. Economists across the country are worried about it. The Reserve Bank of India has raised repo rates on September 30 this year to bring down inflation and to stop fall of the rupee.
With the latest fall, the rupee has lost about one percent of its value against the green back in four trading sessions. It has gone up to 10 percent in this year. After the Organisation of the Petroleum Exporting Countries (OPEC) and the group associated with it agreed to trim the oil production, the cost of crude oil shot up on Friday. Brent crude futures rose half a percent to almost $95 a barrel.
According to managing director at CR Forex Advisor Amit Pabari, if the oil prices go above $100 a barrel, it is bound to set off the alarm bells, and further stress the deficits (current account and trade) and rupee.
