The Rupee's Decline: Causes and Consequences

Rupee Performance Overview

The Indian rupee has recently slipped to a record low as pressures from the unwinding of carry trades intensify.

Factors Influencing the Decline

• The unwinding of carry trades has significantly impacted the rupee's value.
• There is a high demand for dollars in the domestic market.

Central Bank's Role

The central bank's interventions have played a crucial role in limiting the extent of the currency's losses. However, the overall trend indicates that the rupee is likely to remain under pressure in the near future.

Conclusion

In summary, while central bank actions may provide temporary relief, the fundamental issues driving the rupee's decline suggest continuing challenges ahead.