Tough Times For The Indian Rupee

The Indian rupee is a good example of this.  It is a reasonably significant currency, but it isn’t among the best ones in the currency markets today.  You are far more likely to be looking up other major currencies using your currency converter than you would be to look up the Indian rupee.

But that doesn’t mean we shouldn’t look in on it from time to time, to see how it is doing.  And at the moment it would appear that it is having a rough time.  This is mainly due to the conditions it finds itself in, which is why we should take a closer look at what is going on.

There have been a great number of news stories floating around the internet recently regarding this currency.  Its bad performance has a lot to do with importing into that country, as you can see if you read this article on the Bloomberg website.  And as it so often happens, the problem behind India’s problems is nothing other than oil.

So let’s see how the rupee fared against the US dollar recently.  Around a month ago the dollar was picking up 49.353 rupees, but as we are about to see that would change quite a lot.  There were a few jumps during those next few days, with the dollar claiming 49.594 the following day, before dropping to 49.835 the day after and then 49.542 at the end of the week.

But the following week saw a better performance by the Indian rupee.  By the close of play on the Monday, the dollar could do no better than an exchange rate of 47.931.  By the end of that week it had dropped further to 47.200, indicating that the rupee was clearly in the driving seat.

The dollar tried fighting back the following week, but it was clear that the rupee was really doing its best to stay on top of things at this stage.  On the Monday we were looking at a closing rate of 47.200, and while the US dollar managed to push that up to 47.628 during the week, it didn’t stay there.  By the close of play on Friday the rupee had made sure the dollar couldn’t get any further than 47.235 to close out the week.

The first day of June saw a low for that week of 46.973.  The dollar managed to push back over the 47.0 barrier the next day, but it was back down to 46.980 the day after.

That would be the last time for a few days at least that a figure in the 46 region was bagged though.  In fact at the time of writing – halfway through the month – it has yet to happen again.  So indeed it would seem that the rupee is struggling slightly as we get deeper into June.

As the week ending the 5th came to an end, the US dollar was claiming 47.049 rupees.  But as soon as the following week got underway, the dollar didn’t waste any time taking advantage of the current situation regarding oil.  This is where the rupee has struggled, and it showed with a starting rate of 47.477.  And that climbed to 47.514 the very next day.

Of course things did go up and down during that week, but it was clear that the rupee was suffering slightly.  It is in a bad position given the fact that everyone is heading for the safer ground offered by the US dollar.  And that means it could continue like this for a while yet.

So what will happen next?  Will this pattern of the rupee suffering continue, or will it prove to be more of a short term situation than we might expect?  The only sure answer will be obtained by keeping an eye on the exchange rates in the coming weeks.  But of course the issue here is that people seem more eager to invest in the dollar than in the rupee, and that isn’t hard to sympathize with.

Let’s wait and see how this plays out over the next few weeks, to see what happens and whether the rupee can pull back and stabilize its condition.