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Rupee (INR) rises to 74.82 against USD in traditionally difficult month
The rupee rose to 74.82 against the US dollar in opening trading on Monday, marking a significant recovery since April, when it hit an all-time low of 76.91.
This is more significant because it happened in August, a month when the Indian economy usually struggles, and during the COVID-19 pandemic, which is taking a severe toll on both countries.
Last year, August saw the rupee lose all the gains it had made over the previous seven months, and a similar pattern has held across six years in the past decade.
Since 2010, it has lost an average of 2.5% every August, though no coherent theories have emerged as to why this happens.
This year, the rupee has had the advantage of a significantly weaker than average US dollar, thanks in part to concerns about weakening trade relationships between the US and China.
Overall, the dollar fell by 0.09%.
The rupee was further bolstered by an influx of foreign money brought about by share sales.
Axis Bank, ICICI Bank and Bandhan Bank have all attracted major investment, along with mortgage lender HDFC Ltd and several smaller companies.
Overall, India’s income from sale of stock is estimated to be $3.5bn.
India celebrated its 74th year as an independent nation, following the end of British rule, on Saturday.
Its currency has always suffered from instability, however, and was devalued in 1991.
This year, its economy suffered a serious setback when its film industry was forced to shut down as a result of the pandemic.
Known as ‘Bollywood’, the Mumbai-based industry produces more films than any other in the world and is a significant contributor to GDP.
Despite its recent gains, the rupee remains low compared to its position in 2018 and 2019, and its longer-term future is difficult to predict due to ongoing uncertainties around the pandemic.
With major Asian currencies strong overall against the dollar, it remains one of the worst performing of the group.
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