The rupee on Monday started the session on a flat note against the US dollar amid rising crude oil prices and persistent foreign capital outflows. At the interbank foreign exchange, the rupee opened at 82.79 against the dollar and lost ground to later trade at 82.83, registering a fall of 1 paisa over the last close.from Business News: Latest News on Business, Stock Markets, Financial News, India Business & World Business News https://ift.tt/5yaX8RN
The value of a currency, such as the Indian rupee, is determined by supply and demand in the foreign exchange market. When the demand for a currency increases, its value tends to rise relative to other currencies. Conversely, when the demand for a currency decreases, its value tends to fall.
Rising crude oil prices can impact the value of the rupee against the US dollar in several ways. India is a major importer of crude oil, and an increase in oil prices can lead to higher import costs, which can put downward pressure on the value of the rupee. This is because higher oil prices can increase the demand for US dollars, which are needed to purchase oil, and this increased demand for dollars can drive up the value of the US dollar relative to the rupee.
On the other hand, if India is a major exporter of oil or other commodities, an increase in oil prices may boost the country's exports and improve its balance of trade. This can lead to an increase in demand for the rupee, which can push up its value relative to the US dollar.
In summary, the impact of rising crude oil prices on the value of the rupee against the US dollar depends on a variety of factors, including the strength of India's economy, the level of demand for Indian exports, and the country's reliance on oil imports.
