USD vs. INR : Why is rupee falling against US dollar ?

Why is rupee falling against US dollar

Why is rupee falling against US dollar ?

Most of the Fall’13 applicants will be thinking that Why is rupee falling against US dollar? Well it is a common thing nowadays to see the share market tumble and rise, now and then in the Indian economy given the variation in inflation, but one thing that worries the parents and the Fall’13 applicants more is the fall in rupee value against the United States dollar. The parents who dream to educate their child at universities abroad have been in a state of shock as the Indian rupee falls continually against the dollar. Here are some of the reasons why the phenomenon is talking place.

So Why is rupee falling against US dollar?

1)      Disinvestment

It has been seen over the last quarter that many of the financial bullies at Wall Street have predicted a slow growth in the Indian market, as a result of which much of the investment in the Indian industries is being sucked up again and spread over other promising market. This has been the brunt of dollar – rupee clashes and needless to say rupee is suffering. On a closer look one can find that not only the direct disinvestment but the import-export trade-off and especially the rise in import costs has been a great factor while the Indian currency is weakening against its US counterpart.

Is Disinvestment the only reason to Why is rupee falling against US dollar? I guess NO!

2)      Difference in interest rates

The way the Indian economy works is quite different from the US economy . The policy of bond investments in the US markets can fluctuate and the same is happening right now.More over the interest rates set by RBI against the fixed US-Indian currency have led to a lot of attrition to many of the companies which have a global presence and especially those who import a lot of resources from other emerging markets.

Here’s One more reason on Why is rupee falling against US dollar?

3)      Inflation

The exchange rate also depends a lot on the inflation rate of the country. Indian economy is in an overall state of turmoil and the inflation rate is giving no signs of coming down thus leading to a poorer exchange rate.

Economist predict that the INR-USD exchange rate will again stabilize a long period into the next quarter during September at around 56-57 much to the relief of current fall 13’ aspirants ! :D

You can refer more about Why is rupee falling against US dollar at this link and this link

Let us know what’s yours and parents take on Why is rupee falling against US dollar? Comment below and we may come to a good conclusion :)

10 thoughts on “USD vs. INR : Why is rupee falling against US dollar ?

  1. From the last statement I understood that most parents don’t have financial literature. I’m an example for this. I have more knowledge in personal finance and economics than my parents. Sad, that people fail to learn such important stuff.

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