Question

The rupee slumped on Friday to record closing low of 75.20 against the U.S. dollar as deppening concerns
about the economic fallout of the COVID-19 pandemic sent global investors scurrying to dump most
assets, especially emerging market holdings, and opt for cash and the relative safety of the greenback. The
rupee has now depreciated by more than 5.3% in 2020, with the bulk of its losses, a 4.1% slide, having
30.
occurred in March.
The Hindu, March 22, 2020
The per the above article, whether the rupee is appreciating or deprecating against dollar? Discuss the
possible causes of this situation.
4M
atement

Answer 1

Explanation:

I need question of using the class

Answer 2

Answer:

One of the major reasons is economic uncertainty triggered by the global pandemic, COVID-19. It has forced most investors and businesses across the world to seek to conserve that most crucial asset during times of crisis: cash and more specifically the U.S. dollar. The risk aversion as a result of the pandemic triggered by the global outbreak of COVID-19 has been so intense that it has not spared most perceived safe havens including U.S. Treasuries (government bonds) and significantly even gold. The yellow metal too has been sold by investors looking to hold the most liquid and most fungible of all assets — the U.S. dollar.