INDIAN RUPEE VS U S DOLLAR INDIAN RUPEE

INDIAN RUPEE V/S U. S. DOLLAR

INDIAN RUPEE The Indian rupee (sign- ₹ , code - INR) is the official currency of the Republic Of India. The issuance of the currency is controlled by the Reserve Bank Of India. U. S. DOLLAR The United States dollar (sign- $ , code - USD, also abbreviated US$), is referred to as the U. S. dollar or American dollar. It is the official currency of the United States and its overseas territories. Currency Depreciation Currency depreciation is the loss of value of a country's currency with respect to one or more foreign currencies. Currency Appreciation Currency appreciation is increase in the value of a country's currency with respect to one or more foreign reference currencies

The Indian Currency has depreciated by almost 62 times against the U. S. Dollar in the past 66 years. As on 12. 09. 2013 , exchange rate of INR 63. 41 for the USD 1. Exchange rate (INR per USD) Year 1947 1 1966 7. 50 1975 8. 39 1980 7. 86 1985 12. 38 1990 17. 01 1995 32. 43 2000 43. 50 2005 (Jan) 43. 47 2006 (Jan) 45. 19 2007 (Jan) 39. 42 2008 (October) 48. 88 2009 (October) 46. 37 2010 (January 22) 46. 21 2011 (April) 44. 17 2011 (September 21) 48. 24 2011 (November 17) 55. 40 2012 (June 22) 57. 15 2013 (May 15) 54. 73 2013 (Sep 08, 12: 00 IST) 65

Five reasons why rupee is depreciating : 1. Demand Supply of Currency When the demand of foreign currencies increase in respect of its supply then value of local currency decrease in respect of foreign currency. 2. No Balance at Balance Of Payments The Government of India was relaxed with respect to the CAD(current account deficit ) issue as there was a sharp fall in the commodity prices (of gold and crude oil). A large part of the import bill is driven by other resources as well. The facts show that fertilizer imports surged by 30% in the last two years and coal imports have doubled. Therefore, the problem of CAD continues to persist. 3. Dollar On A Horse Ride The main reason causing the rupee to fall is the increase strength of the Dollar Index, which has touched its threeyear high level of 84. 30. The record setting performance of US equities and the improvement in the labor market has made Americans more optimistic about the outlook for the US economy, thereby spurring greater hopes of QE tapering. 4. Lack of Investment It is one of the significance problem that the investment in India is not huge of the foreign company / individual. In fact in 2012 -13 the Indian companies have spent more outside India compared to FIIs in India. 5. Increase in the trend of abroad education The trend of getting higher education in abroad is increasing due to the same the demand of foreign currencies will increase.

The Comparison of Export and Import in last 9 years Rs. in Billions Year Exports Imports % of Export in respect of Import 2004 -05 3, 753 5, 011 74. 89% 2005 -06 4, 564 6, 604 69. 11% 2006 -07 5, 718 8, 405 68. 03% 2007 -08 6, 559 10, 123 64. 79% 2008 -09 8, 408 13, 744 61. 18% 2009 -10 8, 455 13, 637 62. 01% 2010 -11 11, 429 16, 835 67. 89% 2011 -12 13, 208 21, 322 61. 95% 2012 -13 14, 466 24, 366 59. 37%

Effect of Rupee Depreciation : 1. Importers will strongly feel the pinch of falling rupee as they will be forced to pay more rupees on importing products. Buying imported goods will become a very costly. We will have to pay extra on imported goods. e. g. if we bought a product valued USD 1, you paid around Rs 54 (weeks ago) but you will now have to pay of Rs 63 for the same product. 2. Export has to very effected due to Rupee depreciation as exporters will be get less rupees for exporting goods. Exported goods will become cheaper. e. g. if we sold a product valued Rs. 630 , we got USD 12 (weeks ago) but now a days we get only USD 10 for the same product. 3. Inflation If the depreciation in rupee continues, it will further increase inflation because the prices of imported as well as domestic commodities will increase. In respect of domestic goods , the domestic goods will also effected due to transport cost. 4. Students studying abroad Students who are studying abroad will bear the burden of depreciating rupee. Expenses incurred towards the university/college fee as well as that of living will increase. 5. Foreign Travelling Foreign trips become costly. Indians are very interested to spend their vacation in the foreign countries.

Steps for Rupee Appreciation 1. Export Indian economy should take steps for increasing Export and with the help of export, the supply of foreign currencies will increase and the value of Indian Rupee will increase in respect of foreign currencies. 2. Import Indian economy needs to decrease Import and with the help of less import , the demand of foreign currencies will increase and the value of Indian Rupee will increase in respect of foreign currencies. 3. Making government bonds/investment available for investor Making government bonds /investment available to non-resident investors will also increase the inflow of dollars in to the country and help contain the CAD, and in appreciation of rupee. 4. Current Account Deficit The Indian economy needs to make its structural reforms and the gap between the imports and exports. A slowdown in the global economy has adversely reduced the demand for Indian goods. The falling commodity prices on the other hand have increased imports resulting in an imbalance between payments and receipts. With the reduction in exports and an increase in imports, the Current account deficit has increased. 5. Promote Tourism The history of HINDUSTHAN is very famous in the whole world and every person of the world wants to know about it , so Indian government should promote the tourism for the foreign.

Thank You Presented by Name - Rishi Goyal , E-mail – rishigoyal 0202@gmal. com Himanshu Gupta , E-mail – himanshugupta 20793@gmail. com Riya Goyal , E-mail - rggoyalriya 43@gmail. com Richa Jain , E-mail - Richajain 92@gmail. com