Rise in value of rupee in india essay

It may prompt RBI to increase interest rates to check inflationary pressures and in consequence will reduce FDI which is important for make in India initiative.

reason for dollar rise against rupee

Impact of rupee depreciation on Indian Economy :- Importers will be affected the most as they will have to pay more rupees on importing products. However, two important facets have to be noted: i Unlike goods and services, foreign exchange has no direct cost of production. The mechanism of determination of exchange rate may be distinguished broadly into two categories: administered and market based.

Any type of essay. Money is the value assigned to a commodity, a piece of paper, a coin or electronic data think online banking and credit cards. High oil prices inflated the import bill and resulted in further widening of the current account deficit, which accelerated the rupee fall," says Narne of Anand Rathi.

Thus the increased demand for US dollar made FIIs pull out from Indian stock markets and move towards destinations with better returns.

Why indian rupee is increasing against dollar

Fed withdraws its bond buying programme, there might be sudden outward flow of money which will leave India scrambling for dollars. Is credit card money? However, overall export earnings may be adversely affected as Indian exports may lose an edge in international market due to rise in prices. Cost of imported goods will become more. However, there is no increase in the amount of water harvested. For example if you bought a product vauled USD 1, that means you paid around Rs 58 for that around a month ago but now you will get that same product for Rs 68 Oil marketing companies will also feel the pressure of weak rupee which in turn will be passed Impact of Rupee Depreciation on to the consumers as the companies are allowed to do so following deregulation of petrol and partial deregulation of diesel. Its simple mean is; outflow of foreign currency is more from Indian market as compared to inflow of foreign currency. Over the past few months, since August, the rupee has been weakening against the dollar. For example if the U. Depreciation of rupee is definettly a good news for the overseas Indians as those who are working abroad will gain more on remitting money to their homeland. So, it is good news for industries such as IT, textiles, hotels and tourism which generate income mainly from exporting their products or services. It means that the trade war will adversely affect the Indian market and India will also experience the outflow of US dollar from its domestic market.
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Fall in Rupee Value