Aparnna Pradhan 
On Tuesday morning the Indian rupee dropped a little more going down by 24 paise in trade to 94.39 against the US dollar. This move may not seem like a deal but it shows that the Indian rupee is really struggling. The Indian rupee did not suddenly get weaker, it is just that the pressure on the rupee has been building up over time.
The Indian rupee has been getting weaker for five days in a row now. It has lost nearly 1.3% of its value in the last week. A little while ago the Indian rupee was trading close to the 92.5 mark so this drop is pretty significant. When the Indian rupee drops like this it often means that there are some problems, not just a normal fluctuation in the market.
For a lot of people what happens to the rupee might seem like something that only affects big businesses and investors.The truth is, it affects us all. When the Indian rupee gets weaker it makes fuel expensive and imported goods cost more too. It also makes it harder for people to travel abroad or study overseas. If the Indian rupee stays weak it can also worry businesses, investors and policymakers who need an Indian rupee to grow. One of the reasons the Indian rupee is dropping is because of the high price of crude oil globally which is being driven up by tensions in West Asia. There is a lot of uncertainty about what might happen with the US and Iran and this is making the price of oil go up. Since India imports most of its oil and pays in US dollars this means that India needs US dollars, which puts pressure on the Indian rupee. At the time foreign investors are taking their money out of India. This is making the Indian rupee even weaker. When foreign investors leave they convert their rupees to US dollars, which means that the demand for US dollars goes up and the Indian rupee goes down. The global economy is also very uncertain now which is making things worse for the Indian rupee. Everyone is waiting to see what the US Federal Reserve will do with interest rates. This is making investors nervous. When investors are nervous they often put their money in US dollars, which is seen as a bet rather than in currencies like the Indian rupee. To make things worse it is the end of the month and Indian oil companies and businesses that import goods need US dollars to pay for their imports. This means that the demand for US dollars goes up which puts more pressure on the Indian rupee.
Analyst Amit Pabari thinks that the Indian rupee is in a spot right now. It is not weak enough to collapse but it is not strong enough to get better either. The Reserve Bank of India has been trying to help by selling US dollars to reduce volatility. It is not trying to defend a specific value for the Indian rupee. This means that the Indian rupee is still at the mercy of events.
Unless the price of oil comes down and tensions around the world ease, the Indian rupee will likely stay under pressure. For now what happens to the rupee will depend more on what happens globally rather than on how strong India’s economy is.
