One dollar equals 75.9855 rupees. 1 .202 1 On April 7th, the exchange rate of Indian Rupee against the US dollar fell sharply, from 73.32 rupees1US dollar to 74.23 rupees1US dollar. The Indian media pointed out that this is the biggest one-day drop of the rupee against the US dollar in the past 20 months. In the following two trading days, the rupee continued to fall. 12, the rupee fell to 75.06 rupees against the US dollar, a nine-month low. 13, the rupee further fell to 75.4438+0 rupees against the US dollar. The market is still not optimistic about the trend of rupee against the US dollar in the next stage. Anindya Banerjee, vice president of technical research department of insurance company Kotak, said that unless the Bank of India intervened, the rupee against the US dollar would be further under pressure. The rapid increase of new COVID-19 cases in India every day and the blockade measures being implemented by the local government in India will keep the rupee under pressure. Second, behind the fall of the rupee against the US dollar, three major factors have played a major role in promoting it: First, the worsening epidemic situation in India has led to a bleak prospect of economic recovery. The second wave of epidemic in India from the end of February to the beginning of March is far more serious than the first wave, and the number of new infections in a single day has exceeded 654.38+0.6 million. The key economic zones in India, such as Mabang and Kabang, have introduced strict restrictive measures. In addition to basic living services, a large number of service activities have been cancelled: cinemas, theaters and other places are closed, hotels can only provide take-away services, and wedding and fitness places are closed. These measures are currently planned to be implemented until the end of April. The epidemic situation in India and the blockade measures of local governments will affect the prospects of India's economic recovery. The data shows that India's economic recovery momentum has been greatly exhausted in the first quarter of this year. According to the data released by India's Central Bureau of Statistics on June 5438+02, India's industrial output index in February was 129.4, down 3.6% compared with the same period last year. This has shrunk more than in January. 5438+ 10 June, India's industrial output index shrank by 0.9% year-on-year. At the same time, the unemployment rate in India has risen again due to the cancellation of a large number of service activities. 3. According to the latest data from India Economic Testing Center, as of April 1 1, the unemployment rate in India rose from 6.7% two weeks ago to 8.6%. This has cast a shadow over India's economic recovery since the fourth quarter of last year, and some economic research institutions have lowered their economic growth expectations. In its latest research report, Nomura Securities lowered India's economic forecast from the previous 13.5% to12.6%; Goldman Sachs lowered India's economic growth forecast for the second quarter from the previous 33.4% to 3 1.3%. Second, the huge bond purchase plan of the Bank of India suppressed the rupee. On the 7th, the Bank of India announced that it will purchase 1 trillion rupees of government bonds in the secondary market before June 30th, and will purchase 250 billion rupees of bonds for the first time on April15th. The Bank of India announced that this is part of the Bank of India's government bond purchase plan (G-SAP 1.0). At the same time, the Bank of India announced that it would extend the liquidity measures introduced last year for six months until September 30. Fourth, for this huge bond purchase plan of the Bank of India, some research institutions pointed out that this is the beginning of quantitative easing in India. Robert Carnell of ING Bank said in an interview with Indian media that India has joined Indonesia and the Philippines in implementing quantitative easing. India's large-scale bond purchase and quantitative easing may lead to a surplus of rupees, which will lead to the devaluation of the rupee against the US dollar. On July 7, the Bank of India announced its plan to buy rupee bonds. 1 trillion, the rupee fell against the US dollar 1.56%. Market institutions pointed out that unless the Bank of India acts, the rupee will not stop falling against the US dollar. However, the Bank of India has listed economic growth as the top priority among the three difficult targets of inflation, exchange rate and economic growth. Das, governor of the Bank of India, previously pointed out that the Bank of India will use all available tools to promote economic growth. Fifth, in order to ensure economic growth and keep the yield of 10-year government bonds at around 6%, the Bank of India will obviously temporarily increase its tolerance for inflation and exchange rate decline. Third, a large amount of overseas funds flowed out of the Indian capital market, which also led to the fall of the rupee. Due to the rise of the US dollar index and the impact of the Indian epidemic on the economy, 202 1 a large number of foreign securities portfolios (FPI) withdrew from the Indian capital market. The data shows that since the beginning of April, foreign capital has withdrawn from the Indian capital market by 9.465438 billion rupees. CARE, an Indian rating agency, pointed out that the sharp outflow of foreign securities investment and the expansion of the trade deficit have led to the devaluation of the rupee. The Bank of India's commitment to sufficient liquidity has accelerated this process. Regarding the future trend of the exchange rate of the rupee against the US dollar, market institutions pointed out that the rupee will continue to be under pressure, or it will drop to 76 rupees 1 US dollar.