At the beginning of trade, the Indian rupee faced a downturn of 5 paise against the US dollar, making the rate stand at 83.33. These intermittent movements announce the nonstop activities of the forex market that are made up of several economic indicators.
The Indian rupee’s devaluation against the US dollar is a key development that has wide-ranging effects on various participants, including business owners, investors, and policymakers. Imports may become more expensive due to the decrease in the power of the rupee. Accordingly, prices for imported commodities and workmanship will rise, which in turn will cause inflation. Conversely, it may have an adverse effect on importers, but it will help exporters gain more competitive advantage in international markets.
The forex market operates on a much broader platform that is a combination of both domestic and international elements. Factors at home like the rates of inflation, government budget, and economic growth rates, in fact, are key determinants of a strong rupee (the country’s currency). Besides, geopolitical tensions, global economic developments, and the central banking standards of the major countries, especially the Federal Reserve in the US, will play a role in the determination of the exchange rate as well.
Brent crude futures, the global oil benchmark, climbed by 0.35% to $89.32 per barrel. Meanwhile, in the domestic equity market, the 30-share BSE Sensex edged up by 103.64 points or 0.14% to 74,443.08. The broader NSE Nifty also saw gains, rising by 32.45 points or 0.14% to 22,602.80. According to exchange data, Foreign Institutional Investors (FIIs) were net sellers on Thursday, with shares worth Rs 2,823.33 crore offloaded.
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