Rupee Plunges; Centre Raises tax on Gold, Oil

Story Highlights
  • Rupee falls to 79.12 against US Dollar in the early trade today.
  • India raises import tax on Gold and Diesel.
  • in 2022, Rupee has weakened consistently by 6 per cent

New Delhi: The Indian currency weakened to 79.12 on the first day of July amidst worries of persistent inflation and the current foreign fund exodus.

The centre on Friday raised import taxes on gold, whiles increasing levies on exports of gasoline and diesel in an attempt to leverage the declining currency growth.

The Indian currency has been witnessing a steady decline this year, losing more than 6 per cent so far since 2022 began. India’s forex reserves also dropped below $600 billion, plunging by more than $50 billion since September 3, 2021. The drop is reported to have been aftermath of the steps taken by RBI.

The rising benchmark interest rate by the US Federal Reserve has been causing investors to seek higher returns to pull capital away from emerging markets such as India and back into the US. This in turn is causing pressure on the emerging market currencies to depreciate against the dollar.

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