A weak currency does not necessarily mean a weaker economy. In fact, a weak rupee supported by good quality products, can actually boost exports despite global slowdown and attract investments into India
On the domestic equity market front, Sensex rose 92.47 points or 0.14 per cent to settle at 66,023.24 points. The Nifty advanced 28.45 points or 0.14 per cent to 19,811.85 points.
The recent drop in the value of the Indian rupee might not cause a big change in inflation rate unless the currency falls even more, according to experts. Economists say that the Indian currency would need to drop significantly more than it already has against the dollar for it to affect inflation.
The US dollar index, which measures the greenback against six major global currencies, shot up on Thursday after data showed a higher-than-expected rise in headline inflation in the world s largest economy. The data strengthens the possibility of the Federal Reserve raising interest rates again. Higher US interest rates lead to a stronger dollar, exerting downward pressure on emerging market currencies like the rupee.