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Discussion > Income Tax >

Why Indian currency is depreciating

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FCA, Future CA

[ Scorecard : 4902]
Posted On 20 August 2013 at 12:53 Report Abuse

dear friends.

please some one share.. why the Currency is depreciating in a very bad way.

WHAT COULD BE THE CONSEQUENCES OF DEPRECIATION...

however, it and ites companies are gaining a lot



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NAGASAI.K
Article Assistant

[ Scorecard : 183]
Posted On 20 August 2013 at 13:37

If the demand for the dollar in India is more than its supply, the dollar appreciates and the rupee depreciates. Demand for dollars may be created by importers requiring more dollars to pay for their imports or by Foreign Institutional Investors (FII’s) withdrawing their investments and taking the dollars outside India, thus creating a shortage of dollar supply, which, in turn, can also increase the demand for the dollar.

Similarly, when the supply of dollars in India increases with respect to its demand, the value of the dollar decreases in terms of rupees. Supply can be created by exporters bringing in more dollars from their revenues or FIIs bringing more dollars in India to spur their investments.



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NAGASAI.K
Article Assistant

[ Scorecard : 183]
Posted On 20 August 2013 at 13:59

Consequencies: 

                          Refer the below link: (Hope this may useful to you)

http://zeenews.india.com/business/news/finance/rupee-depreciation-how-will-it-affect-you_77821.html



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CA Simarpreet Singh Gulati
Chartered Accountant

[ Scorecard : 515]
Posted On 20 August 2013 at 17:35



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Mihir
Wealth Manager

[ Scorecard : 4629]
Posted On 20 August 2013 at 17:45

Numbers are important but so are sentiments. Confidence level in the investors has weakened, and India, being a sound investment destination, is no longer sound anymore, because of ineffective policies of the government. 

Inflation, rupee fall, food security bill, border tensions, local body tax, and of course massive corruption, will hit the country hard. 



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SIVASIVA
FCA, Future CA

[ Scorecard : 4902]
Posted On 20 August 2013 at 17:55

yes mahir, simarpreet, nagasai...  it is required for knowledge purpose.

of course, for SFM also, it is helpful



Total thanks : 3 times



Shweta
CA

[ Scorecard : 56]
Posted On 20 August 2013 at 19:54

There are many factors leading to movement in rates and leading rupee to depreciate . Interest Rate , Inflation ,Speculation , Fiscal deficit , Demand & supply ,political stability etc  I guess it is not because any one of  factors its combination of all these  factors .

 




Deepesh Ruhela
Keen to Learn

[ Scorecard : 3013]
Posted On 20 August 2013 at 20:31

Originally posted by : Shweta

There are many factors leading to movement in rates and leading rupee to depreciate . Interest Rate , Inflation ,Speculation , Fiscal deficit , Demand & supply ,political stability etc  I guess it is not because any one of  factors its combination of all these  factors .

 




Deepesh Ruhela
Keen to Learn

[ Scorecard : 3013]
Posted On 20 August 2013 at 20:34




Aryan Singhania (Pallav)
❤ Work Hard Party Harder ❤

[ Scorecard : 28824]
Posted On 21 August 2013 at 00:15

The value to dollar is given by petrol only.This is called Derivative Trading. America has stopped valuing its Dollar with Gold 70 years ago.
Americans understood that Petrol is equally valuable as Gold so they made Agreement with all the Middle East countries to sell petrol in Dollars only. That is why Americans print their Dollar as legal tender for debts. This mean if you don't like their American Dollar and go to their Governor and ask for repayment in form of Gold,as in India they won't give you Gold.

You observe Indian Rupee, " I promise to pay the bearer..." is clearly printed along with the signature of Reserve Bank Governor. This mean, if you don't like Indian Rupee and ask for repayment,Reserve Bank of India will pay you back an equal value of gold
..

 

At present the problem of India is the result of buying those American Dollars. American white papers are equal to Indian Gold. So if we reduce the consumption of petrol and cars, Dollar will come down

 



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