Accordingly the rupee devalued further on Thursday falling to a new record low of Rs 70.20 against the dollar. Earlier the rupee, which was last at 70.1 to the dollar, further slipped to 70.20 during early trade on Thursday. As per report the fall was due to the drop in value of the Turkish lira, which helped the US dollar to gain and this has spread fears that the economic slump in Turkey could spread to other countries.
Moreover on Wednesday Union Minister Arun Jaitley said that the country has enough foreign exchange reserves to deal with the volatility and that the developments are being closely watched by the concerned departments. Furthermore the rupee has been on the down slide since the beginning of this year and has slipped around 9% in 2018. Further reports also suggest heavy sell-off in global currencies increased the demand for safe haven assets and caused the rupee to plunge.
Meanwhile this fall of the rupee against the dollar
will go on to affect the buying capabilities of the country, aka imports and it
will also start inflating household expenses and hit personal budgets. As per
the latest data from the RBI, its foreign exchange reserves were at
$402.70 billion in the week ended August 3, down $1.49 billion when compared to
the preceding week.
