The United States Dollar strengthens against major currencies while the Indian Rupee depreciated, hitting a fresh record low. Markets were already struggling to cope with domestic and international pressures before the outbreak of the Coronavirus, now declared a worldwide pandemic and national emergency across countries. As countries around the world are grappling to contain the spread and deploy emergency services focused on saving lives, the Indian currency hit a fresh record low.
Why is the Indian Rupee Falling?
- Coronavirus cases: The Union Health Ministry of India as of 23 March 2020 has reported a total of 415 Covid-19 confirmed cases. Prime Minister Narendra Modi called for a Janta Curfew on Sunday to slow the spread of the virus COVID19. The Central Government has also imposed Section 144, the power to issue an order in urgent cases of a nuisance with apprehended danger as per the Code Of Criminal Procedure, 1973.
- Investors selling Indian stocks: As per the latest update by the National Securities Depository Limited, foreign institutional investors (FIIs) had sold a net of more than $12 billion, of shares and bonds. The top 30-stock S&P BSE Sensex has fallen by 22% so far.
- Demand for US dollars: US dollar is strengthing against all major currencies in the foreign exchange market. This is no surprise as investors around the world are preparing for a global economic slump. In the 2008 financial crisis, the US dollar strengthened about 22% against the Euro, as the world hoarded the safest asset which is the US dollar.
- Falling Gold prices: It is not just the Indian Rupees that is taking a hit. Gold prices have also seen a drop of 8.20% in the last 30 days. Despite measures from the government and the central bank, the Reserve Bank of India (RBI) to safeguard investors. Investors do not seem to have an appetite for any asset including the yellow metal as the demand for dollar increases further in anticipation of a drop in oil prices and the US stock market.
Falling Rupee and Remittance
In addition to your convenience, the important factors to take into account before remitting money anywhere are: exchange rates, transfer fees, and transfer speed. If the US dollar continues to rise against the rupee, it means you get more rupees for every dollar you send.
The question is when should you send money to India? Should you wait for the dollar to strengthen further or send it now?
As USD strengthens, INR is likely to drop further, as low as INR 77/ USD. If you like to be notified when USD to INR hits 77 or 80, subscribe to CompareRemit’s exchange rate alerts.