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The rupee closed to a historic low on Thursday at Rs 69.05 against a dollar. So far in the current week, the value of rupee has dropped by 43 paise against the US currency. Meanwhile, on the other side, the US currency witnessed a year high in comparison to global currencies. Earlier, the rupee had hit another low on May 29 against the US dollar. Experts are of the opinion that US currency emerging stronger than global currencies is due to the Federal Reserve Chairman Jerome Powell testimony to the US Senate. Reports say that Fed chief’s comments on Wednesday empowered the expectation of interest rate hikes.
On the other side, market experts and industry insiders said that rupee stooped to a historic low because of a forex sentiment and some other local issues.
While these were the economic or market-related issues but there is the political reason where marketers believe hit the value of rupee, taking it to a historic low against US currency.
As Parliament’s monsoon session is underway, on Friday, Lok Sabha speaker Sumitra Mahajan while taking the no-confidence motion moved by Congress, TDP and other opposition parties against Prime Minister Narendra Modi government.
The no-confidence motion was moved by Congress veteran Sonia Gandhi, and other opposition parties on Wednesday which was accepted by Lok Sabha Speaker Sumitra Mahajan. Marker insider believes that the no-confidence motion against the running government also affected rupee value, hitting forex market sentiment.
However, it is not expected that monetary authorities had intervened in the foreign exchange market. Not only rupee, but other Asian currencies witnessed decline against US dollar due to tariff war between US and China.