Rupee depreciation

Presented By
POOJA
BHARAT
MONIKA
MANISHA
SURYADIPTA DUTTA

TOPICS TO BE COVERED
FIVE TOP CURRENCIES OVER THE WORLD.
PRESENT VALUE OF MONEY IN LAST 5 YEARS.
WHY DOLLAR IS MOVING U P AND RUPEE
GOING DOWN?
WHY RUPEE HAS BEEN FALLING ?
IMPACT ON FALL OF RUPEE AGAINST
DOLLAR.
CONCLUSION

What is the name of the top most
currency in the world?

One Kuwaiti dinar is equivalent to US$3.30.

One Bahraini dinar is worth US$2.65.

One Omani rial is worth US$2.59.

One British pound sterling purchases US$1.50.
The United Kingdom is the third largest European
economy only behind Germany and France.

One Jordanian dinar is equal to US$1.41.
Jordan remains reliant on foreign assistance for
essentials to fight poverty.

April -44.30
April -50.64 April-54.46
April-60.35
*SOURCE-http://ycharts.com/indicators/indian_rupee_exchange_rate
April-62.31
28th Aug 2013-68.80
25th Sept 2015
 The Current Value of Rupee is 65.13.

Why dollar is moving up and rupee is
going down?
Reason
 Dollar is in Demand BRIC countries
like India, so a huge percentage of
investment in India is from outside
the country, especially from US.
 Due to recession in US, big
institutions are collapsing. They are
suffering huge losses in their
country.
 So to recover losses, they are
pulling out their investments from
India. Due to this pulling out of
investment by these big
companies from India, demand of
dollar is raising up and rupee is
depreciating.
 Commodity prices are
crashing at international level.
Importers are trying to
accumulate dollars, as they
have to pay in terms of dollars
and at the end demand is
increasing against the rupee.
Reason

Recession in developed economies like US made big
institutions to pull out their money from India

 India has become an attractive
destination which attracts foreign
capital from non-resident citizens, it is
not enough to make up for the trade
deficit.

 The country's current account
deficit - a broader measure of the
trade deficit - has also ballooned
due to the :
 India's foreign exchange reserves
have dropped from a peak of
$320bn in September 2011 to
$290bn now

• More people tend to sell rupees to buy
dollars.
 Exporters cannot bring in enough
dollars.
 foreign investors increase the demand for
dollars as they convert their rupee assets
into dollars to take their money out.

The fear of bubble bursting in gold has resulted in
investors viewing dollar as a safe currency.
Source : http://www.gold.org/investment/interactive-gold-price-chart#

 Since India imports more goods (in value terms) than it exports, it
results in a huge imbalance in trade, or what is called a trade deficit.

IMPACT ON FALL
OF RUPEE AGAINST
DOLLAR:
POSITIVE
IMPACT
NEGATIVE
IMPACT

FDI LIMIT
 Government should increase the limit of FDI in
existing sectors.

STABLEENVIRONMENT
 Government should create a stable political
and economic environment in order to make
India an attractive destination for foreign
investment.

IMPORTSUBSTITUTION
 Government should develop the import
substituting industries in order to make India
less dependent on imports .

SELLFOREXRESERVES
 RBI should sell Forex reserves and buy
Rupees in an immediate action in order to
arrest the further decline in the value of
Rupees.

RAISETHE DUTIES/TAXES
 Government should raise the import duty on
the gold in order to decrease the domestic
demand for gold imports.

Rupee depreciation

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