The Rupee Dollar Relationship and Its Implications

The rupee has already lost nearly 10% of its value compared to the dollar in the past year. A weak rupee translates to a higher import bill and this is most obvious when you consider the price of oil. The real question we should be asking is, why on earth is the US dollar appreciating so much? Well, the simplest answer is the US Federal Reserve is trying to fight inflation. In a bid to fight inflation, they are ramping up interest rates faster than most global economies.