Since July last year, the Indian rupee has fallen by more than 27%
against the US dollar, one of the biggest declines among Asian
currencies.
Understanding Money
Money is the value assigned to a commodity, a piece of paper, a coin or
electronic data. It can be of
different types-commodity money, representative money, fiat money and
commercial bank money. Gold coins, cocoa beans, cattle or anything that
has a value of its own and is used as a medium of exchange is commodity
money. The use of commodity money is similar to barter, except that the
commodity used is widely accepted
and can be easily handled.
The value of a currency is its purchasing power – that is, what you can get for a unit of the currency in terms of goods and services. In today’s context when it is said that a currency is declining or being devalued, it is with respect to other currencies.
Free Fall
According to BBC, this falling of Indian currency with respect to USD is mainly due to some reasons. They being.
Understanding Money
Money is the value assigned to a commodity, a piece of paper, a coin or
electronic data. It can be of
different types-commodity money, representative money, fiat money and
commercial bank money. Gold coins, cocoa beans, cattle or anything that
has a value of its own and is used as a medium of exchange is commodity
money. The use of commodity money is similar to barter, except that the
commodity used is widely accepted and can be easily handled.
The value of a currency is its purchasing power – that is, what you can get for a unit of the currency in terms of goods and services. In today’s context when it is said that a currency is declining or being devalued, it is with respect to other currencies.
Free Fall
According to BBC, this falling of Indian currency with respect to USD is mainly due to some reasons. They being.
HUGE TRADE DEFICIT
LOWER CAPITAL INFLOWS
HIGH CURRENT ACCOUNT DEFICIT
DEVALUATION PRESSURE
LOW GROWTH AND HIGH INFLATION
RUPEE SPECULATION
What can be done?
# We should stop or decrease our imports mainly oil and improve exports. Currently oil import companies are making large purchases for which large amount of Dollar is required Nations like The united states such as Indian have arranged their oil sources and mostly transfer.
# Now Govt of India has to be interested in enhancing manufacturing. More discounts and rewards by means of tax refund or motivation for less publishing organizations to be announced, so that natural manufacturing will improve and there by transfer of such product will get decreased and unwanted manufacturing may be released.
# Traditional clear policy decision is needed. The marketers, traders will come forward to get and single window venture approval should be applied with firm guidelines.
# RBI also prohibited financial institutions from dealing in rupee forex futures dealing and choices, except on part of their customers.
May god be with us.
THANKYOU.
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