Dollar vs Rupee: Amidst the war-like situation related to Iran, while on one hand there is a huge rise in the prices of crude oil, on the other hand the Indian Rupee fell to its all-time low of 92.62 per dollar on March 18. In such a situation, according to Goldman Sachs, the position of the Indian rupee is the weakest among South Asian countries and it may fall to Rs 95 against the US dollar by next year. If this happens, it can prove to be a big blow to the Indian economy.
In the last one month alone, the rupee has declined by about 1.77 percent. However, the Reserve Bank of India is continuously trying to reduce the pressure on the rupee by intervening in the market. Considering the market situation, RBI has sold about 18 to 20 billion dollars in a single week.
Why is the rupee falling?
In the month of March, foreign investors withdrew equity worth about $5.5 billion from the Indian market, due to which the Nifty 50 fell by about 8 percent. On March 17, the rupee had hit 92.41 against the dollar, marking a decline of about 6.75 per cent in the last 12 months, and then closed at an all-time low of 92.46.
According to Shantanu Sengupta, Indian economist at Goldman Sachs, the rupee is expected to fall to 95 per dollar due to the possible closure of the Strait of Hormuz due to the US-Israel conflict and fears of an increase in the current account deficit.
decline in growth rate
Goldman Sachs also believes that this may have an impact on India’s economic growth rate. The organization has revised its earlier estimate and reduced the GDP growth rate for the financial year 2026-27 from 7.0 percent to 6.5 percent. Along with this, the inflation rate has been estimated to increase by 30 basis points, while the current account deficit (CAD) may increase by 0.8 percent to reach 1.2 percent of the GDP.
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