Today, i.e. Friday (December 27), the rupee fell sharply against the dollar. After the day’s trading session, it fell by 33 paise and closed at its lowest level of 85.59.
There was a fall of 55 paise during the trading. On Thursday (December 26), it had closed at Rs 85.26 against the dollar.
This is the biggest drop in the last 6 months
This is the biggest fall in the rupee in a single day this year. Earlier, on June 4, the day of Lok Sabha election results, the rupee fell by 44 paise to 83.50. In June, the rupee had closed at the level of 83.06.
The rupee has weakened by 2.40% against the dollar this year
This year, the rupee has weakened by Rs 2.40 against the dollar. On January 1, 2024, the rupee was at the level of 83.20, which fell to the level of Rs 85.59 at the end of the year, i.e. today.
Due to the strengthening of the dollar and the rise in crude oil prices
According to experts, this decline is due to the strengthening of the dollar and the rise in crude oil prices. Foreign exchange traders attributed the decline in the Indian rupee to strong demand for the US dollar and rising crude oil prices due to geopolitical uncertainties.
In fact, last week the US central bank, the Federal Reserve, cut interest rates twice during the year 2025. After that, the dollar index strengthened, increasing by 0 .38 percent to reach 107.75.
Import will become expensive due to fall in rupee
The falling rupee means that importing goods will become costly for India. Apart from this, traveling and studying abroad has also become expensive. Suppose when the value of the rupee was 50 rupees against the dollar, Indian students in America could get 1 dollar for 50 rupees. Now, for 1 dollar, students will have to spend 85.06 rupees. Due to this, everything from fees to accommodation, food and other things will become expensive.
How is the value of a currency determined?
If the value of another currency decreases in relation to the dollar, it is called a fall, breakout or weakening of the currency. Currency depreciation in English. Every country has foreign currency reserves with which it carries out international transactions. The effect of the increase and decrease in foreign exchange reserves is visible on the price of the currency.
If the dollars in India’s foreign exchange reserves are equal to the US rupee reserves, then the value of the rupee will remain stable. If our dollar declines, the rupee will weaken; if it increases, the rupee will strengthen. This is called the floating rate system.