Rupee Depreciation: Indian currency took a big hit on Tuesday. The rupee has crossed 96 against the dollar. This is the weakest level for the rupee in the last two months. The rupee fell about 0.2 percent in today’s trading session, after settling at 96.1450 per dollar. This is not an insignificant reduction. The rapidly changing conditions in the international market are responsible for this. Investors around the world are under a lot of pressure right now. India is a net energy importing country, which means we import a large portion of our requirements from abroad. In such a situation, when the rupee weakens against the dollar, we have to pay higher prices for imports.

Crude oil ruined the whole game

Crude oil is the biggest villain behind the plight of the rupee. Brent crude oil prices rose by over 1.5 percent in the global market. After this increase, the price of crude oil has crossed 107 dollars per barrel. In fact, the situation in the Middle East continues to deteriorate. The ongoing conflict between the US and Iran has now become a headache for the global economy. The market is worried that this tension could lead to disruption of energy supply. Although there were signs that crude oil exports from the Middle East were getting back on track, the tense situation has dashed all these hopes.

The flight of investors from the stock market

The heat of this global tension is not limited to currency markets. From the Indian stock market to the bond market, it has had a profound impact. There is an atmosphere of panic among foreign investors. They are rapidly withdrawing their money from the Indian markets. If we look at the figures for the month of September, so far foreign investors have withdrawn a huge amount of 3.7 billion dollars from here. Due to the huge outflow of dollars from the market, the rupee has come under severe pressure. When the withdrawal of dollar increases, the rupee automatically begins to weaken.

Dark clouds have loomed over the economy

The country’s import bill will directly increase due to the increase in oil prices. The impact will be visible in the form of inflation, as everything from transportation to manufacturing will become more expensive. On top of that, a sell-off in the stock market by foreign investors has completely dampened the sentiment. Rupee crossing 96 is a clear indication that global market pressure is now dominating India. If the situation between America and Iran does not improve in the coming days, this fire of crude oil can further burn the rupee.