Fall in value of Indian rupee against dollar

The Indian Rupee is continuously going downward on Tuesday it touch Rs 74 against the dollar value as corona virus panicked the investor which directly impact in deteriorating the financial market. At inter-bank foreign exchange the domestic currency started the session with a massive plunge and it touched Rs 74.08 before starting a recovery. On weekly basis Indian rupee has lost around 2.26%. The reason for the deteriorating of the rupee value is also because of the foreign investment as the market is also crashing so the foreign investor is not showing their interest in the investment in Indian market which affect the rupee value. Rising food prices pushed up retail inflation in November to more than three year high, the industrial sector output shrank continuously which shows the deepening slowdown in the economy. Rising inflation and fiscal slippage resist the rupee value to appreciate. Overall macro-economy is not stacking up well in terms of fiscal problem and sluggish growth. 

The reasons were many: the restriction over Yes Bank by RBI, corona virus fear that shaken the economy worldwide prompting a global stock sell-off and uncertainty over whether RBI would turn to a rate cut to help the counter-act the effects of the virus outbreak on the economy. Yes Bank seizure by government is coming at the time when India is facing slowdown in the economy due to the corona virus effect.

https://economictimes.indiatimes.com/markets/forex/rupee-dives-54-paise-to-73-87-against-dollar/articleshow/74517528.cms

Crash of the market

A stock market crash is sudden decline of the stock price across a significant cross section of a stock market which result in a significant loss of paper wealth. From the last few weeks there is continuous fall in the market all over the globe.

Corona virus plays an important role for this condition of market, as China is the major exporter of the raw material for the production but because of the problem in China the trade between China and other country is stopped so it directly hamper the production of other industries which result in the fall of stock prices of that relative organization. Transportation and travelling between the two countries are also not so frequent because of the spread of Corona virus so it directly affect the airlines sector. There is no big trade agreement  and physical meet take place between two companies of different countries which also affect the business. When we talk about pharmaceuticals sector the major raw material is exported from the China which slowdown the pharma sector, these are the overall impact of Corona virus in overall sector of the country.

Fall in Crude oil prices, crude prices nearly plunged nearly 30% after top exporter of crude oil Saudi Arabia launched a price war in response to a failure by leading producers to strike a deal to support energy markets which create a pressure on the oil refineries companies regarding their profit, which bring down their stock in the market.

Yes Bank crisis, problem of Yes Bank  create a negative impact in the mind of consumers, consumers are loosing their interest on the banking system, it create a type of fear in the mind of people and it shook the banking system people are not assured whether any bank will run or fall in the future because of which the banking stock is falling regularly.

Foreign Portfolio Investor selling, FPIs continued to be net seller of  Indian stock in the month of March because of the Corona virus and Yes Bank crisis. In the March so far the stock sold of worth Rs 8997.46 crore in the cash market. Foreign Investor put the pressure on the Indian rupees and value of rupees is coming down and it touched Rs 74 this directly impact the Indian market and if it continues to then it have greater impact on Indian Economy also.

https://www.timesnownews.com/business-economy/markets/article/five-reasons-why-sensex-saw-biggest-ever-intraday-fall-today/562815

These all become the major reason for the crash of the Indian market from last few days.

View on Yes Bank Downfall or Collapse:

In the last few days we all heard about the collapse of the Yes Bank and its create a kind of sensation in the market so here lets understand what actually happen with the Yes Bank.

Financial position:- the financial position of the Yes Bank is declining over the last few years because of its inability to raise capital, the bank was making losses and inadequate profit from last four quarters.

Divergence in Loan:- There is continuous divergence in the figure of NPA given by Yes Bank and RBI audit which create the doubt in the mind of shareholder for the bank and it change the mindset of shareholder for Yes Bank.

Major loan takers :- Anil Ambani Group, Cafe Coffee Day, IL& FS, C G Power, Vardhraj Cement, etc majority of the company which taken the highest amount of loan is themselves a big defaulter in the market which is also one of the reason for the downfall of the bank.

Governance Issues :- The bank has also experienced governance issues and practices in recent years which lead to steady decline of bank, which decline the reputation of the bank in the market.

False Assurance :- Bank management had indicated to the Reserve Bank that it was in talks with various investors and they were likely to be successful but in reality there was no concrete proposal from investors to put the kind of money that the bank required to survive and grow.

Outflow of liquidity :- The bank was facing regular outflow of liquidity which means that bank was witnessing withdrawal of deposits from customers.

Non- serious investors :- The bank was engaged with a few private equity firms for exploring opportunities to infuse capital but due to some reason they are not invested in the bank according to RBI.
https://www.businesstoday.in/sectors/banks/6-reasons-why-yes-bank-collapsed/story/397655.html