Deprecation Of Rupee More and morerupees are brought inour country anddollars are sold More and morerupees are sold anddollars are brought
Impact ↑Imports ↑Depreciation In Rupee ↑Inflation ↑Interest Rates ↓Fixed Income ↓ Growth ↓Jobs Importers Sells Rupees & Buy Dollars There Is No One To Buy Rupee How Will It Appreciate? High Purchase Of Dollars → more Depreciation In Rupee
FY12 EstimatesImports>Exports$470bn>$320bn-$150bn Trade Deficit+$90bn Service Revenue-$60bn Net Deficit
Productive And Unproductive Assets PRODUCTIVE ASSET 11BN CRUDE OIL 1.REFINED 2.CREATES JOBS ETCIMPORTS 35BN UNPRODUCTIVE ASSET 10BN GOLD 1. 1/3rd OF IMPORTS 2. STORAGE 14BN OTHER
Reason Every year→1000tones of gold is imported Overall gold=total GDP almost What if no gold imports? Exports=imports So if u put the same money in investments your income will increase
Loan taken Imports faster than exports impacting stock market,corporates etc Why demand for dollar is high? India has taken loan from Europe Europe is worsened Foreign banks are not giving loans to India. Instead pressurizing to giveback loan→pressure on rupee
Chinese currency China not affected? Whole country is facing problems why not china? This is because Yuan is always remains stable neither depreciates norappreciates.
Solution? To balance demand & supply Proper implementation of monetary policy and fiscal policy in ourcountry Stability in imports & exports,etc.