Indian Rupee hits life time low of 57.30 against US Dollar on Friday afternoon. How long will it continue to fall? What is making it fall? What is RBI doing?, these are many questions arises.
What is making it Fall?
India is a major importer of Oil and Gold. Crude Oil has hit 18th months, where as Gold has corrected in last few days. With low prices Indian oil companies and gold importers want to take positions. Which has increased demand for US dollar.
It will not be correct to say that Rupee is depreciating but Dollar is appreciating on improved demand.
How Long will continue to fall?
With rising demand from oil companies, dollar will continue to stay strong un till Oil prices rebound in international market.
Analysts say the rupee could continue to fall further in the near-term, dragged down by the momentum from the worsening global risk environment. The worst is not over for rupee and it may depreciate further to Rs 58.00- 58.40 level per dollar next week, they adds.
What is RBI doing?
Reserve Bank of India is a regulatory body which checks fluctuation of currency. With rising dollar, RBI has intervened and asked oil companies to buy USD from PSB's, this will help controlling free fall of rupee against dollar.
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