With India’s Inflation rate highest in 7 Years: Rupee is now Asia’s ‘worst’ performing currency as COVID cases surge
WPI inflation rose to 7.39% in March against 4.17% in Feb. This indicates that commodities could soon become expensive. Currency exchange went from ₹ 72 per dollar to ₹ 75+ & growing .
The government has released the inflation rates and data which is directly proportional to the price of commodities common people consume and it seems like the economical crisis in India is resuming with the rising COVID cases.
As per the new data released today, India’s WPI Inflation has been registered at 7.39% above expectations (5.9%) in March, which last time was at this level in 2014.
While the CPI inflation rose to 5.52% in the month of March. Separately, the country’s factory output, measured in terms of the Index of Industrial Production (IIP), witnessed a contraction of (-)3.6 % in February, two separate data released by the Ministry of Statistics & Programme Implementation (MoSPI) showed on Monday.
On the other hand, The Indian Rupee hit a nine-month low of 75.4 against the US Dollar on Tuesday and has lost nearly 4.2% over the last three weeks — one of the biggest losers among the emerging market currencies.
Federal Bank expects it to fall further to 76 by year-end. The currency’s slide may be exacerbated by the unwinding of short dollar positions against the rupee, which ICICI Bank estimates have grown to $50 billion.
“Economic growth is going to get more impacted than what we are expecting,” said V Lakshmanan, head of treasury at Federal Bank in Mumbai. “We are underplaying the impact of Covid.”
The next few months could be a bloodbath for the economy as COVID restrictions and lockdown-like situations emerge, especially when the High Courts and Medical experts have also requested a 15-day nationwide lockdown to break the chain of transmission.
