The India rupee, for the first time, fell below the 80 per the US dollar on Tuesday. Experts attributed the record low to foreign investors pulling their money out of the economy. Since January 19, the rupee has fallen 7.1 per cent, according to market data.
Inflation worries due to oil prices and rising interest rates and fears of a recession have made foreign investors risk averse. Not only the currency, but the equity market in India has also faced the brunt of this impact.
Since its peak of 61,700 in October 2021, India’s benchmark index Sensex has now fallen to 54,500. In June, Sensex fell to as low as 51,000.
However, the rupee is not the worst-hit currency in the world. It is not even the worst-hit currency in Asia. Sri Lanka, which is battling its worst economic crisis since independence in 1948, has seen its currency falling nearly 80 per cent in the last six months. From 202.2 per US dollar on January 19, the Sri Lankan rupee has fallen to 362 per US dollar, on July 19.
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The Pakistani rupee has fallen over 22 per cent, from 176.16 per US dollar on January 19 to 216.36 on July 19. Japanese yen too has performed worse than the rupee, falling 20.48 per cent in the last six months. It was trading at 137.95 per USD on July 19.
The British pound has done worse against the US dollar than the Indian rupee or the euro. The pound has fallen 13.69 per cent in the last six months, as compared to the euro’s fall of 11.3 per cent.
Other Asian currencies like the Thai baht, Korean won, Bangladeshi taka, Philippine peso and Taiwanese dollar too have performed worse than the rupee.
Where do these currencies stand against the rupee?
The Sri Lankan rupee has fallen over 66 per cent against the rupee in the last six months. It was trading at 2.7 per INR on January 19 and has fallen to 4.5 on July 19.
Pakistani rupee, on the other hand, has fallen 16.1 per cent against INR from 2.36 per INR to 2.74 since January. The Japanese yen has also shown a weak performance against INR, falling 13.15 per cent in the last six months.
Which currencies have performed better than the rupee?
Chinese yuan renminbi, Malaysian ringgit and Australian dollar have performed better than the Indian rupee. The Russian ruble has also performed better than the rupee as Moscow fights western economic sanctions imposed after it invaded Ukraine late February.
The ruble has risen 32.03 per cent from 1.03 per the Indian rupee on January 19 to 0.7 per INR on July 19. The Russian currency has recovered owing to a rise in the oil exports to India, which have surged by 286 per cent in the January-April 2022 period, according to official data.
The Australian dollar has risen 2.15 per cent from 0.0186 to 0.0182 per INR. Also, both the Malaysian ringgit and Chinese yuan renminbi have surged close to 1.5 per cent, against the value of INR, in the last six months.