Thursday, Zerodha co-founder Nikhil Kamath stated that the rupee’s level of 82 is “not such a horrible thing” in light of the currency’s decline. He also provided an infographic comparing the depreciation of the Indian rupee to the Japanese yen, euro, Australian dollar, British pound, and Swiss franc.
“The rupee’s value of 82 is not too horrible… The United States is too far away, save for commodities valued in dollars… “If this trend continues, large corporations in the United States may have to relocate to be competitive,” said Kamath. within a tweet
The rupee has decreased by around 10 percent in the current calendar year. However, the currency rose 35 paise to 81.58 versus the US dollar in Thursday’s early trade as the US dollar retreated from its lofty levels.
Between September 28, 2021 and September 28, 2022, Kamath divulged statistics on the fall of numerous currencies. During the time, the Japanese yen sank 29.77%, the British pound fell 24.88%, and the Swiss franc lost 5.12%, according to the statistics. The Indian rupee depreciated by around 10.01 percent, the euro by 19.65 percent, and the Australian dollar by 11.55 percent.
Since the beginning of this year, the rupee has been falling, mostly owing to the strengthening of the US dollar, the risk-averse mindset of investors, and the rise of geopolitical threats related to the situation in Ukraine.
In recent months, the primary reason for the rupee’s depreciation was the ongoing outflow of dollars due to the departure of foreign portfolio investors (FPI). Between October 2021 and June 2022, foreign institutional investors sold 2.46 trillion rupees in the Indian stock market.
The Monetary Policy Committee (MPC) of the RBI will announce its interest rate decision on Friday (Sep 30). Analysts anticipate another 50 basis point boost on Friday to curb inflation, which surged in August to almost 7 percent, beyond the RBI’s upper goal of 6 percent.
The RBI’s rate-setting panel has raised rates by a total of 140 basis points over the past three monetary policy reviews since May of this year. The repo rate, which is the interest rate at which the RBI loans to commercial banks, is now 5.40 percent.