Indian rupee in free fall: Why it's worrying

Published on 05-Sep-2018

Khushboo Razdan

What's up with the rupee?

On Wednesday, the Indian rupee hit a new all-time low of Rs71.79 against the US dollar.

The currency, which had hovered around Rs68.5 per dollar till a month ago, suddenly nosedived, falling nearly four percent in a month.

Since January the rupee has lost over 10 percent of its value, with the historic fall making it Asia's worst performing currency in 2018.

India's finance minister Arun Jaitley on Wednesday said reasons for fall of rupee are global and not domestic.

Sinking rupee: The triggers

India is the third largest consumer of oil in the world. Head of Economic Research at Standard Chartered Bank Anubhuti Sahay told CGTN, "India bears the brunt whenever there's an increase in global oil prices."

Although prices remained volatile and ranged between 70 and 75 US dollars per barrel between June and August, they have risen sharply over the last few weeks, hitting 78.05 US dollars per barrel on Tuesday.

Govindraj Ethiraj, founder of IndiaSpend told CGTN "concerns over impending US sanctions are also leading to a spike in crude prices, now more dollars are going out than what's

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coming in."