So there you are ! Rupee has finally succumbed and breached 45 mark against the greenback dollar. This blog has seen it all – from 45 against the dollar to the highs of 38.5 in December 2007 and now back to 45. Indeed a full circle.
Till few months back most of the analyst were saying that Rupee will never fall as low as 45 and will stay in the range of 39-40 (even I was pretty sure about it), but it has happened and now even 50 is looking like a possibility.
What has taken everyone with surprise is the time taken by rupee to depreciate – While it took more than a year to appreciate by 6-7 rupee against the dollar, it has just taken 3-4 of months to depreciate which has sent many running for cover !
How did this happen?
As US is the biggest consumer of fuel, if globally fuel prices rise – dollar goes down. They are inversely proportional to dollar pricing. If fuel prices go down Dollar strengthens – and thats what has happened. Fuel prices have come down to nearly $110 per barrel from a high of $147 just a couple of months back.
Due to this fuel prices fall, globally the perception of US Economy has turned into positive giving strength to dollar against other currencies.
Last year importers were rejoicing, while this year it is the exporters who are happy.
So what is your take? will it touch 50 anytime soon or will it move toward 40 ?