Demonetisation has affected our economy and business in a way unpredicted by many. In an early trade on Thursday, morning rupee fell another 28 paise and hit lowest of 39 months at 68.84 against US dollar. A lower opening at equity market affected the rupee’s status and it opened at 68.85 and closed at 68.80. Its downfall was also affected by foreign funds outflow and greenbacks surge in the overseas market. Also, lower opening at domestic equity market also put a pressure on the rupee. From the time of Donald Trump’s victory in USA presidential elections, rupee’s value has reduced by 2.92 percentage.
India’s move on demonetization on high denomination notes of Rs.500 and Rs.1000 was bound to have a short run effect on trade. After this move, a lot of foreign investors have opted out that impacted our economy for short term leading to the weakening of the rupee. Also, the US bonds are yielding a strong dollar value leading to rupees downfall.
Forex dealers said that a strong month-end demand for the American currency from importers continued capital outflows by foreign funds and the dollar’s bull run on being on a hike in Fed’s interest rates, mainly affected the domestic currency. The rupee has gone down 31 paise which is close to nine-month low of 68.56 against the dollar on Wednesday.