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Facts and remedies for Falling down of Rupee value in international market

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Posted by : NIFM
23 August, 2013, 6:22 PM
  Since couple of months back Indian Rupee has fallen so much. Everybody is worried for this fallen and wants to know how much it will fall further. Indian Govt. has taken up various measures to control the falling of Rupee value but all efforts going in vain. The foreign flows of money are going from India frequently due to which Rupee value has fallen 65 against the Dollar$. Decreasing Rupees value creates inflation in country certainly. To control the inflation is the biggest challenge before Indian economy. Inflation has to control as early as possible otherwise results of this would be very vast and dangerous for Indian economy and for individuals. We would like to highlights our view that how the price of any currency determine by inflow and outflow of funds similarly as demand and supply forces. We can get the foreign funds by exporting goods and services in recent times our export ratio is very less then import which has been led the misbalances of current account deficit (CAD). Now this misbalance of CAD has become a major problem before economy.  To balance the CAD Indian Govt. has raised heavy import duty on Gold & Silver as India is the second largest gold importer in the world but this step is not enough to balance the CAD. Below are the some points & suggestions which can help to control the current situation. 1.      Govt. should provide tax rebate to FII’s so that they encouraged to more investments in India. 2.      Govt. should apply the fixed rate of exchange for some time till the value of Rupee stop falling. 3.      Indian peoples should use more and more country made goods and avoid foreign made goods, this will lead less demand of Dollar. 4.      Gold is always considered as the safe asset class and generally peoples believes to invest in Gold is the safest investment to discourage this Govt. should introduce some bonds and debentures which provide safe returns. The flow of money will again circulate in the market and this liquidity will help to grow the economy. Everyone should educate that investments in the Gold is not good for the growth of economy as it is not productive.   If every Indian will act upon above mentioned points will help to stable the economy and stop falling the value of Rupee

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