Indian rupee started on Thursday with a fall today, against the U.S dollar. The currency is trading at Rs69.69 with a weakness of 15paise. On Wednesday, rupee gained by 16ps to close at a low of 69.54 against greenback.
In the Forex market, the last ten days, the rupee closed at 69.54-level with a gain of 16ps against the dollar. Rupee gained 27ps to close at 69.88 against the dollar on Monday. It jumped 18ps to close at 69.70 v/s the dollar on Tuesday. Rupee gained 21ps to close at 70.28 against the dollar on Wednesday.
Why is rupee weak or strong? The price of rupee depends entirely on its demand and supply. Import and export also have an impact on this. In fact, every country has a repository of currency from other countries, from which they deal. It is called foreign exchange reserves. From time to time, its figures are released from the Reserve Bank of India (RBI).
US-Dollar has the status of global currency. This means that most of the items to be exported are valued in dollars. This is the reason that the cost of Rupee compared to the dollar shows that Indian currency is strong or weak. The US-dollar is considered to be a global currency, since most countries in the world use it in international business. It is easily acceptable at most places.
India also imports edible oils and pulses on a large scale. Prices of edible oils and pulses can increase in the domestic market on account of rupee weakness.