The Indian rupee reversed all the gains made earlier in the day to close at an all-time low of Rs 71.21 per dollar on Monday, tracking a weak trend among its global peers and amid concerns of a wider trade deficit.

According to a report by the Economic Times, for the first time ever, the rupee closed below the 71 mark following the weak trend in emerging market currencies and rising crude oil prices.

On August 16, the rupee had fallen to a record low of Rs 70.20 per dollar.

The value of the Rupee has been falling since the beginning of 2018 and is reported to have slipped around 9% this year. It has also been reported that a heavy sell-off in global currencies increased the demand for safe-haven assets and caused the value of the rupee to go down.

According to analysts, this crisis reflects Turkey’s refusal to raise interest rates to curb double-digit inflation.

This fall of the rupee against the dollar will go on to affect the buying capabilities of the country, in relation to imports. It will also start inflating household expenses and affecting personal budgets.

For example, crude oil, crude palm oil, iron ore, etc. will affect the expenses of an individual in an indirect manner. Any goods that have these items as raw materials or inputs will also become more expensive.

Indian students who have taken loans to fund their foreign degrees will also be affected since students pay for their living expenses abroad in foreign currency but their loans are in Indian Rupees.

Experts opine that the consecutive hike in RBI repo rate is also a contributory factor to the falling value of the Indian Rupee.