Universal Coaching Centre -

Enter your keyword

8053+ OFFICERS SERVING THE NATION UNIVERSAL COACHING CENTRE Let's join hands together in bringing Your Name in Elite officers list. JOIN US 25 YEARS OF EXCELLENCE MEET NEW FRIENDS AND STUDY WITH EXPERTS JOIN US Nothing is better than having friends study together. Each student can learn from others through by teamwork building and playing interesting games. Following instruction of experts, you and friends will gain best scores.

ULP Click here! Click here! Classroom Programme NRA-CET Test Series
Click here ! Org code: XSHWV

post

Rupee Falls to 87.66 Against US Dollar

Why in the News ?

The Indian rupee weakened by 12 paise, closing at ₹87.66 against the US dollar in the foreign exchange market. This reflects ongoing currency market volatility and global economic influences including the rising dollar index, impacted by factors such as crude oil prices and monetary policy decisions.

About Rupee Depreciation :

  • On 5th August 2025, the Indian rupee depreciated by 12 paise, settling at ₹87.66 per US dollar.
  • The decline reflects increased demand for the US dollar in the forex market, influenced by global economic factors and US Federal Reserve policies.
  • Traders cite global uncertainties and strong US economic data as influencing factors, alongside global trade uncertainty.
  • The rupee’s performance was also affected by capital outflows, including foreign portfolio investments, and import-related dollar demand.
  • This fall highlights the volatility in emerging market currencies amid strengthening of the US dollar and macroeconomic imbalances.

Global Factors and Dollar Index

  • The dollar index, which measures the US dollar’s strength against six major global currencies, was at 98.67 during intra-day trade.
  • A higher dollar index generally indicates weaker performance by other currencies, including the rupee, impacting real return value for investors.
  • The dollar is strengthening due to expectations of higher US interest rates and interest rate decisions by the US Federal Reserve.
  • Rising geopolitical tensions and concerns about global economic slowdown also favor the US dollar, affecting foreign investor sentiment.
  • Global investors often turn to the dollar as a safe-haven asset during uncertainty, influenced by global economic factors and market operations.
About Currency Depreciation :

● Currency depreciation refers to a fall in the value of a country’s currency relative to others.

● It impacts imports, making them costlier, and can widen the trade deficit due to increased import costs.

● It may boost exports through export promotion efforts but also affects inflation and foreign investor sentiment.

● The RBI may intervene in forex markets to control excessive volatility through market operations and currency swap agreements.

● Important for GS Paper III (Indian Economy) and topics like Balance of Payments, Exchange Rate Regimes, and Forex Reserves.