Depreciation of Rupee
May 06, 2015
Depreciation of Rupee
How is currency valued?
When the demand is greater than supply, the value of the
currency increases and vice-versa.
Political environment in the country
Retrospective taxation
Inability to pass any policy reforms and other clouds surrounding
the Indian economy
Loss of confidence in investors
Money flowing out of Indian equities
Reasons for Depreciation
Withdrawal of FII’s
Strengthening of Dollars
Weaker Capital Markets
Other Capital Flows
Political Uncertainty and Corruption
Demand Supply Rule
Fiscal Deficit
Oil Prices
Weaker Capital Markets
Eurozone crisis
Rise in gold prices
Causes
Impact of depreciation of Rupee
Exporters are the biggest
beneficiaries
NRIs become richer
Tourism industry will flourish as the
holidays in India will get cheaper.
Imports will become expensive•Oil prices will increase
•Rise in inflation
•Poor returns on FII’s
•Difficulty in repayment of
loans
•Foreign education will get
expensive
•Foreign holidays will get
expensive
CONCLUSION
Rupee deprecation has some serious disadvantages and if
this fall is not controlled in time, it can have serious effects
on the Indian growth story and also it can lead to
downgrading of Indian economy by rating agencies all over
the world. The recent report of Standard and Poor indicated
how the economy can take a bad hit if the situation is not
controlled immediately. The rupee certainly has a
widespread impact on NRI’s to the common man of the
country who is fuelling his car fuel tank. The time has come
when the Reserve Bank of India and the Central Government
has to intervene and take conscientious steps and frame
policies reforms to control the situation.
• READ MORE
Thank You!
Twitter Website Facebook
• Registered office: Kotak Securities Limited, 1st Floor, Bakhtawar, 229, Nariman Point, Mumbai - 400021. SEBI Registration No: NSE INB/INF/INE 230808130, BSE INB 010808153/INF 011133230/INE 011207251, OTC INB 200808136, MCXSX INE 260808130.
• Disclaimer: Investments in securities are subject to market risks, please read the SEBI prescribed Combined RDD prior to investing.
• * Awarded Best Brokerage Firm in India by AsiaMoney in 2006, 2007, 2008 and 2009