The cryptocurrency market is considered highly volatile because we can see the price fluctuation a lot. This happens here and we see it often but I think that this is the good thing about the crypto market. Crypto is not the only asset that is volatile and even fiat is volatile. Even there are many other things that we can see going up and down. These days INR and UST price is going down. It's not that USD is growing instead the value of INR is falling and this is why more INR is used to match with 1 US dollar.
INR is the fiat currency of India and its managed by the RBI (Reserve Bank of India). It's a government body that manages the policies and everything related to fiat currency management. They are also the ones who prepare policies for the banks and financial institutes. Search policies are meant to be a good impact on the price of the INR currency and they keep on reviewing this policy every quarter. I believe the more impact on the Fiat currency is done by the foreign direct investment which is also called FDI.
The investors look for policies that make the process easy for them so that they can invest any time and they can earn good money out of their investment. Needless to say that this amount is huge so any change in the policy makes a bigger impact on the price of the INR currency. Every country also has a surplus of U.S. dollars that is required for international transactions while doing imports. Crude oil is one other thing that India purchases from abroad and uses the US dollar for payment.
The Indian rupee fell to a record low today vs the US after the US Federal Reserve hinted at more aggressive rate hikes to tame inflation. The rupee opened at a record low of 80.2850 per U.S. dollar and depreciated further to 80.58 per USD, as compared to 79.9750 in the previous session. Overnight, the after the Federal Reserve unveiled a third straight jumbo interest rate hike, said more were in the pipeline and warned the battle against inflation was straining the US economy.
This is not a piece good news for the Indian rupee because if it keeps on falling then the government has to pay more money for the import and this will bring more deficit loss. Although the Reserve Bank of India has been trying to control the drop it seems like they are not able to as of now and I hope they are trying all the possible ways to put control here. I still remember the days when one USD was equal to almost 40-45 INR in my childhood and now it's going to be almost double which I think is a matter of concern. The inflation in India is a lot and it has been increasing in the past few quarters. The fuel costs have also increased drastically in the last couple of months and if it continues then probably more burden will be put on the shoulders of citizens in the country.
Surprisingly the government still thinks that the crypto is highly volatile whereas Fiat is also on the same path and they are not able to do anything it seems. I still have confidence in the government that they will bring something that can control the leakage. But I also hope that they need to think again about cryptocurrencies and blockchain. This is a new form of money that is volatile but it can also give more opportunities to the people.
Bringing positive regulation for the cryptocurrency will help people earn money and this is the need of time. This way at least one thing has been confirmed that crypto is not the only asset that is volatile instead even the Fiat currency is almost the same. Maybe the percentage is not too high as compared to Bitcoin but it is also not low the way it should be.
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