Amid the ongoing war in the Middle East, the Indian Rupee has seen a historic fall on Monday. Despite initial gains, the rupee has declined because economic fundamentals were not in favor of the currency. Rupee has crossed the level of 95 per dollar for the first time and reached 95.21 per dollar. A decline of 0.3 percent has been recorded throughout the day.
Here, Leader of Opposition Rahul Gandhi has directly targeted the government regarding the weakening rupee. He has accused PM Modi of putting the future of the country at stake.
What has Rahul Gandhi said by posting?
While posting on X, Rahul Gandhi wrote that the rupee has reached 95. It is moving towards the figure of 100. The stock market has crashed. The economy has been ruined. Jobs have ended. Income is decreasing. The savings have been completely wiped out. The cylinders have gone missing. Why, because the Prime Minister is a compromiser. He is desperate to save himself and his economic system. But 140 crore Indians know that PM Modi has put the future of India at stake.
What is the reason for rupee fluctuations?
Reuters has shared a report regarding the fluctuations in the rupee on Monday. It said that the RBI’s move to impose new limits on banks’ onshore positions late on Friday evening motivated banks to reduce their dollar holdings in the domestic market and also to create positions in the non-deliverable forward (NDF) market.
Given this large exposure, which is estimated at between $25 billion and $35 billion according to Reuters, this change brought the onshore dollar/rupee rate well below the NDF rate. Companies took advantage of this arbitrage opportunity by buying dollars in the onshore market and selling them in the NDF segment. This limited the rise of the rupee. Due to this, price fluctuations were seen in different markets.
The report said that strong demand for dollars from big companies to hedge their short-term liabilities also put it under pressure. Due to this the rupee lost its initial gains. With the opening of the market on Monday, it jumped by one percent and reached the level of 93.60. This decision of RBI has come at a time when there is a lot of pressure on the rupee. Apart from this, the situation at the global level due to the ongoing war in the Middle East has also affected the prices of the rupee.