Rupee Depreciates against Dollar
The Indian Rupee tanks by a massive 106 paisa to close at the all-time low of 60.72 for the first time against dollar on heavy capital outflows and month-end dollar demand from importers, even as RBI intervenes to stem the currency slide, last month. Again on 8th July , 2013, the INR plunges to an all-time low of 61.21 per USD.
In the International market, there are always ups and downs of share prices, indices, commodity prices and currencies .But during last few months, the unimaginable fall of the INR against USD, creates havoc in our minds. Though the USD remains strong against any other currency in the World, the situation is unlike against INR. The damage of INR is the worst of all currencies. No Indian economist has ever thought of such a poor performance of INR. Nobody has thought of INR depreciating to bellow 1/60 of USD.It is still depreciating lower.
The historic fall of the value of INR happens at such a time, when the country has a number of other economic difficulties.
While the recession of the US is cooling down and coming to an end and the Federal Reserve Bank decides to withdraw the packages, the International currency market becomes volatile from last few sessions.
The after-effect of currency market is also reflected in all Indian shares and commodities. India imports about 70-80% of the domestic consumption of crude oil from other countries for which it has to pay the cost in the form of Dollars .The sudden fall of the value of INR against USD creates a rise of prices of petroleum and petroleum related products. There is a rise of price of petrol and diesel and its spiral effect is observed in other prices.Auto, taxi, byke, transport, vegetables, foods, fruits and all consumer durables become costlier.
We, the citizens of free India , are so unfortunate that after such a long period of our independence ,we cannot self-dependant on food and oil production .We import the most from other countries and pay them in dollars .Directly or indirectly , its bills are paid by the consumers. The upper middle class families labor hard to get their income and send their children abroad for higher studies, which becomes impossible day by day .To go for a vacation to other countries becomes a dream only.
The sectors, which import instruments ,machineries and its parts have to pay more .So laptops, computers, refrigerators, TVs and A/Cs are to cost more .In the name of cost reduction , those sectors have to cut off manpower ,which ultimately create unemployment .Even numbers of sector stop to exist.
According to the circular dated 28th June 2013, from RBI, the foreign debt of the nation during 2012-13, is 390 billion dollars which is increased by 13% on year to year basis.
In economy, it is a fact that when goods are costlier, the consumer buys a minimum. If the condition worsens, it creates stagflation. Perhaps India goes through that phase.
From the last so many years, there has been no such remarkable increase in export of domestic items. Added to the crisis, there is a fall of foreign exchange, coming through the working Indian mass abroad.
If the situation remains like this, the situation of the 90’s would not be far away.
Analysts find the following 5 major steps to curb the situation.
1. We should try to utilize our own minerals like coal and stop importing them.
2. We should find and utilize the oil reserves of our land.
3. We should stop importing Gold.
4. We should make an environment to attract FII.
5. We should try to stop rupee depreciation.
Also read the topic : click me
In the International market, there are always ups and downs of share prices, indices, commodity prices and currencies .But during last few months, the unimaginable fall of the INR against USD, creates havoc in our minds. Though the USD remains strong against any other currency in the World, the situation is unlike against INR. The damage of INR is the worst of all currencies. No Indian economist has ever thought of such a poor performance of INR. Nobody has thought of INR depreciating to bellow 1/60 of USD.It is still depreciating lower.
The historic fall of the value of INR happens at such a time, when the country has a number of other economic difficulties.
While the recession of the US is cooling down and coming to an end and the Federal Reserve Bank decides to withdraw the packages, the International currency market becomes volatile from last few sessions.
The after-effect of currency market is also reflected in all Indian shares and commodities. India imports about 70-80% of the domestic consumption of crude oil from other countries for which it has to pay the cost in the form of Dollars .The sudden fall of the value of INR against USD creates a rise of prices of petroleum and petroleum related products. There is a rise of price of petrol and diesel and its spiral effect is observed in other prices.Auto, taxi, byke, transport, vegetables, foods, fruits and all consumer durables become costlier.
We, the citizens of free India , are so unfortunate that after such a long period of our independence ,we cannot self-dependant on food and oil production .We import the most from other countries and pay them in dollars .Directly or indirectly , its bills are paid by the consumers. The upper middle class families labor hard to get their income and send their children abroad for higher studies, which becomes impossible day by day .To go for a vacation to other countries becomes a dream only.
The sectors, which import instruments ,machineries and its parts have to pay more .So laptops, computers, refrigerators, TVs and A/Cs are to cost more .In the name of cost reduction , those sectors have to cut off manpower ,which ultimately create unemployment .Even numbers of sector stop to exist.
According to the circular dated 28th June 2013, from RBI, the foreign debt of the nation during 2012-13, is 390 billion dollars which is increased by 13% on year to year basis.
In economy, it is a fact that when goods are costlier, the consumer buys a minimum. If the condition worsens, it creates stagflation. Perhaps India goes through that phase.
From the last so many years, there has been no such remarkable increase in export of domestic items. Added to the crisis, there is a fall of foreign exchange, coming through the working Indian mass abroad.
If the situation remains like this, the situation of the 90’s would not be far away.
Analysts find the following 5 major steps to curb the situation.
1. We should try to utilize our own minerals like coal and stop importing them.
2. We should find and utilize the oil reserves of our land.
3. We should stop importing Gold.
4. We should make an environment to attract FII.
5. We should try to stop rupee depreciation.
Also read the topic : click me
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