Rupee Struggles with High Volatility Against US Dollar.

Rupee Struggles Amid High Volatility Against US Dollar

Written by: Supriya kadu

Edited by: Pinky Deshmukh

Last Updated: January 22, 2025

Summary: Indian Rupee witnesses high-volatility against the US Dollar amid global events.

Indian rupee saw significant volatility against the US dollar, underlining worries about both internal inflationary pressures and the state of the world economy. The rupee first fell to a low of 83.50 to the US dollar as the Indian financial markets opened, but it soon recovered to 83.25.

The analysts have stated that number of internal and international factors influence the fluctuations. While the US currency continues to hold its strength on expectations of interest rate hikes by the Federal Reserve, international markets remain cautious due to conflicting economic signals from major economies. The dollar is now in higher demand thanks to global events, while the emerging market currencies like the rupee have lowered.

The volatility is also influenced by domestic issues, such as worries over trade deficits and inflation. As import prices are hiking and declining export demand put pressure on the rupee, India's trade balance has come under scrutiny. The Reserve Bank of India's currency market operations are keeping a close eye on the rupee's stabilization measures.

The volatility in rupee may continue unless there is a major improvement in the state of the world economy or a decrease in India's import bill.

Global events are being watched by investors, and even while the Indian rupee is navigating an unstable economic environment, it is still vulnerable to further volatility.