The Rupee - Big Fall ...And Its Fallout

IN cricket, what separates 99 from 100 is just one run. But it is the century that gets the batsman applause and a place in the record books.

- Shwweta Punj

The psychological threshold for the Indian rupee against the dollar was 80. Never mind that when it crossed 75 to the dollar last March, it had already plumbed an all-time low. Yet, when the Indian currency first went past the 80 mark briefly on July 19, and again the day after, it had breached the high water mark and saw panic buttons being pressed across economic stations, including in government circles.

In a written statement to Parliament, Union finance minister Nirmala Sitharaman on July 18 cited global factors such as the Ukraine war, the soaring crude oil prices and the worldwide financial squeeze for the fall of the rupee (79.96 on that day). Thus she absolved the Narendra Modi government of which she is a part of any blame. She also pointed out that other major currencies like the British pound, the Japanese yen and the euro had weakened more than the rupee and that the Indian currency had, in fact, strengthened against these currencies. Indeed, the British pound has declined 12.27 per cent between December 31, 2021 and July 15, 2022 and the euro by 11.3 per cent compared to the six per cent decline in the rupee’s value in the same period.