InvestorQ : Why is the Indian rupee again weakening and why is the RBI not supporting the rupee as it normally does?
Rashi Mehra made post

Why is the Indian rupee again weakening and why is the RBI not supporting the rupee as it normally does?

Answer
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sarah Leo answered.
6 months ago


Rupee has been under pressure for quite some time now. The Indian rupee fell to a 1-year low as it slumped by 50 paisa in a single day to Rs.72.74/$. Clearly, the RBI was not supporting the rupee at the 72/$ levels, as it has normally done. The emergence of the Coronavirus cases in India had an impact on Rupee as it is expected to impact tourism and trade. The rupee also came under pressure as FIIs have pulled out nearly Rs.20,000 crore from equity and debt in the last 2 weeks since the pandemic hit equity markets. There is also a fear that China could drop the Yuan value to boost growth and that could weaken currencies across most of the emerging markets. RBI is actually in a dilemma because if it cuts rates, as is being expected, that could only weaken the rupee further.