Narendra Modi: Competition between Rupee and BJP, who will fall lower?

The Indian Rupee breached the ₹69 for a US dollar level for the first time on Thursday. On Wednesday it had closed at a 19-month low of ₹68.73.

Rising prices of crude, the looming trade war initiated by the US imposing tariff on imports, the US sanctions on Iran and ultimatum to countries including India to stop oil imports from Iran, say experts, have led to the Rupee depreciating against the US dollar.

Although this has increased Current Account Deficit, there is no alarm yet in view of the substantial foreign exchange reserve of over 410 billion US dollars. There is, however, concern at the Rupee emerging as one of the worst performers and experts said that unless the Reserve Bank of India intervened immediately, a further slide of the Rupee to ₹70 a dollar cannot be ruled out.

The plunge of the Rupee reminded people how Narendra Modi as the then Gujarat chief minister and BJP’s prime ministerial candidate had mocked the Government and the then Prime Minister Dr Manmohan Singh.

During 2013-14, the Rupee was fluctuating between ₹56 and ₹62 and both Bhartiya Janata Party and the Gujarat chief minister had blamed the then UPA government for inept handling and management of currency.

Recalling that at that time Narendra Modi had compared the value of the Rupee sliding up to the age of the then Prime Minister, Indian National Congress on Thursday reminded the Prime Minister that the value of the Rupee had actually exceeded the age of the Prime Minister (68).

Twitter also had a field day re-tweeting Narendra Modi’s old tweets and recalling that BJP had pledged to restore the value of the Rupee at ₹45 for a US dollar.

Consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices kept the Rupee under pressure.

Global oil prices have climbed after the US asked its allies to end all imports of Iranian oil by November. Concerns over supply disruptions in Libya and Canada also pushed prices higher.

Higher crude oil prices and a declining rupee are a double whammy for India, forex dealers said.

Sensex was down by 90.26 points, or 0.25 per cent, at 35,126.85 in early trade on Thursday.