The document discusses the depreciation of the Indian rupee against the US dollar. It provides definitions and examples of currency depreciation and then lists several causes of the rupee's depreciation, including dollar strength, a widening trade deficit, and high oil prices. It outlines impacts of the depreciating rupee such as higher inflation, increased prices for imported goods, and effects on companies' balance sheets and foreign debt. Finally, it discusses some potential solutions to stabilize the rupee like exporters purchasing more rupees and providing oil bonds, and concludes that slow growth, weak capital inflows, and a large current account deficit are major reasons for the rupee's depreciation.

1. DEPRECIATION OF RUPEE
Abhishek Mohanty
Ashutosh Gupta
IMIS,BBSR

2. CURRENCY DEPRECIATION
 Currency depreciation is the loss of value of a country's
currency with respect to another country’s currency.
Let us assume 1$ = 1 Rupee
Americans own $100 and the Indians own Rs.100
If India buys or imports Rs. 5 worth of product from USA then India
would have Rs. 95 and USA would have $105
USA is 10.52% wealthier now
$ 1 = Rs. 1.10

3. CAUSES FOR RUPEE DEPRECIATION
 Dollar strength
 Widening trade deficit
 Weakness in domestic equities
 Foreign Institution Investments (FII)
 Persistent Inflation
 Fiscal deficit: (government expenditure >tax revenue)
 Growth slowdown
 Oil Prices
 High Interest Rates
 Lacking Political Will
http://profit.ndtv.com/news/cheat-sheet/article-reasons-why-the-rupee-is-sinking-every-day-326160

5. IMPACT OF RUPEE DEPRECIAITON ON
INDIAN ECONOMY
 Inflation graph and Fiscal deficit to scale up
 Imported goods
 Impact on Oil Imports
 Impact on Companies Balance Sheet
 Impact on Companies foreign debt
 Prices of Cars, Electronic gadgets and home appliances will go
up
 Impact on Indian students and travellers abroad
 NPA (Non-Performing Assets)
 Stock Markets and FIIs
 Impact on Common man

6. SOLUTIONS TO STOP FALL OF
RUPEE:

7.  Exporters Should Buy Rupees
Moral Influence
Delay Import Payments
To Provide Oil Bonds
Review limits for foreign investment
 Sovereign Bonds to NRIs
Sovereign Overseas Bonds
Tightening Gold Imports


8. CONCLUSION
 The major reasons for rupee depreciation are slow economic growth rate,
weakening capital inflows and widening current account deficit
 Rupee depreciation will benefit the Export oriented IT sector only in the short –
run.
 Indian Energy sector that is hugely dependent on Imports are hit very badly by
weakening of rupee against USD
 To stabilize the currency exchange rate The RBI has reduced the limit
for outbound investment and remittances from India , Restricts the import of gold
and oil by increasing the import duty, have increased the limit of FDI Investments
in 12sectors and enhanced FII limits in government and corporate bonds
 http://www.thehindu.com/business/markets/govt-rbi-taking-steps-to-stabilise-
rupee/article4995540.ece

9. THANK
YOU