Since independence, the rupee has depreciated almost 20 times: in 1948, 1 dollar was available at 4 rupees and then there was no debt on the country. When the first five-year plan was implemented in 1951, the government started taking loans from abroad and then the value of rupee also started decreasing continuously. The value of rupee depends entirely on its demand and supply, and imports and exports also have a direct effect. India imports more than exports. A country that imports more than it exports has a higher demand for dollars. India is one of the major importers of crude oil and imports about 80 per cent of the oil, undoubtedly the rising crude oil prices in the international market are the main reason for the fall in the value of rupee.

There is a need to free the manufacturing sector from cumbersome rules. Certainly, through such effective steps, the depreciation of the rupee against the dollar can be checked. Also, if we start using indigenous goods, then the cost of importing foreign goods will be saved. India has no time to rest. For India to become a $5 trillion economy by 2025, we need to export at least $2.5 trillion worth of goods and services, as exports currently account for about 25% of the total gross domestic product (GDP).

In July 2022, India's rupee breached a historic low of 80 to a dollar mark for a day. While the Finance Minister, Nirmala Sitharaman, in the Parliament cited factors such as the Russia–Ukraine war and rising oil prices behind the depreciation, the Reserve Bank of India (RBI) Governor spoke about the simultaneous dumping of financial assets by the foreign portfolio investors (FPIs). Till July 2022, the FPIs sold off US$ 29.6 billion worth of Indian equity and debt after three straight years of net positive investments in Indian financial markets. The inflation growth rate is halted for the time being, but it has not drastically gone down either. July World Price Index (WPI) inflation was at 13.93 percent—compared to 15.18 percent in June. So, the prices in the economy will remain at a high level. Therefore, monetary tightening by the RBI is here to stay.

If a country with free capital mobility fixes its exchange rate with the US dollar and then sets interest rates above the Federal Reserve rates, then foreign capital would flood in, mainly in search of higher returns. Heightened capital inflow would then raise the demand for the local currency and eventually, the local currency would appreciate, breaking the peg with the US dollar. Similarly, if interest rates are set below Fed rates, then there will be a capital flight and subsequent depreciation of the local currency, once again breaking the dollar peg.

So, when capital flow restriction cannot be practically implemented, which is the case in today’s globalised financial world, the policy trilemma boils down to two choices: (a) Floating exchange rate and an independent monetary policy, and (b) fixed exchange rate and external monetary policy dependence. Rich developed countries go for the first option, while some others (like most of the countries that adopted the euro) have to follow the second one.

Measures that India could take to improve value of Rupee:

India fits into the first option bracket. The country has capital mobility, a floating exchange rate and an independent monetary policy—by which it sets domestic interest rates as per the need of the economy. However, the policy tussle remains and what the Indian rupee is experiencing in the last four years bears testimony to that. The RBI periodically intervenes in the foreign exchange market to stabilise the rupee, but the policy trilemma is bound to make the apex bank’s foothold extremely slippery in its quest for simultaneous exchange rate and inflation management.

The Indian Rupee is falling in international market mainly because of an increase in the imports more than the exports.

Due to this the demand of dollar becomes higher than the supply because of rised imports and the Indian Currency Rupee Depreciates.

The cost of crude oil is very high and as India imports more than 80% crude oil ,the foreign capital outflows and the dollar overseas becomes more strong.

In 2022 ,foreign investment shares of almost 200,000 cr were sold , this money that they received was converted into USD for exports, this caused Rupee to fall even more.

The decline in Rupee is also due to Russia-Ukraine war, Corona Pandemic, increased Corruption, Global economic challenges, etc.

As India mostly depends on imports, so the value of rupee becomes weak, we have to pay more for same quantity of items. This results in an increase of the cost of raw materials.

The weak domestic currency boosts exports & foreign buyers gain more purchasing power.

The biggest impact of falling rupee is on inflation as we keep on importing more and more at higher prices, the prices of commodities goes on increasing, adding to further strain on our currency.

The Indian government can adopt following measures to improve value of rupee:-

1.) Increase in Exports.

2.) Decrease in Imports.

3.) Increase Foreign Dierct Investments.

4.) Boosting Tourism.

5.) Boosting Make in India Project.

6.) Improvimg Technology, etc.

As money flows out of India, the rupee-dollar exchange rate gets impacted, depreciating the rupee.

A falling rupee puts pressure on the already high import prices of crude and raw materials, resulting in higher imported inflation. "The Rupee is falling against the dollar primarily because of the growing trade deficit -- imports are increasing at a much higher pace than exports. The increase in imports is mainly due to a sharp increase in crude oil prices following the Ukraine crisis. The increase in the import bill for coal and other essential commodities particularly raw materials has bloated the import bill. A weaker rupee will make these imports more expensive, which will have a short-term negative effect on domestic production and GDP as a whole," said Jyoti Prakash Gadia, Managing Director, Resurgent India. Since India mostly depends on imports, including crude oil, metals, electronics, etc. the country makes payments in US dollars. Now if the rupee is weak, it has to pay more for the same quantity of items. In such cases, the cost of raw materials and production goes up which gets passed on to the consumers. On the other hand, a weakening domestic currency boosts exports as shipments get more competitive and foreign buyers gain more purchasing power. However, in the current scenario of weak global demand and persistent volatility, exporters are not supportive of the currency fall. The falling rupee's biggest impact is on inflation, given India imports over 80 per cent of its crude oil, which is the country's biggest import. The global crude prices have sustained at over $100 a barrel since Russia's invasion of Ukraine in February this year. High oil prices and a weaker rupee will only add to inflationary pressures in the economy.

▪️Measures to improve value of rupee:-

1. Indians have to improve high technology equipment manufacturing. 2. Permit Foreign direct investments judiciously to improve capital inflows. 3. Improvement in Indian Entrepreneurship. 4. Allow healthy competition in trade. 5. Safe guard GDP growth 6. Value addition to our own raw materials. 7. Attaining self sufficiency in food production. 8. Improve R&D investments 9. Transparent pro-active & supportive Government policies. 10. Change in education system to prepare Scientific, Engineering and highly skilled work force.

FACTORS FOR INDIAN RUPPEE FALLING IN THE INTERNATION MARKET ARE:

1) Starting with the global factors such as the on going Russia-ukrain war, soaring crude oil prices and tightening of global financial conditions are among the key reasons for the weakening of the Indian rupee against the dollar... Analysts agreed the currency is being buffeted from multiple fronts globally.

2) The Indian rupee has come under intense selling pressure in recent weeks due to a perfect storm of global headwinds which analysts say will continue to pummel the currency in the months ahead.

3) Now talking about how it's going to affect our economy..... As money flows out of India, the rupee-dollar exchange rate gets impacted, depreciating the rupee. A falling rupee puts pressure on the already high import prices of crude and raw materials, resulting in higher import inflation.....

4) Measures to improve the value of money are.... Sell foreign exchange assets, purchase own currency.Raise interest rates ...... reduce inflation (make exports more competitive.Supply-side policies to increase long-term competitiveness.

When it comes to making investments, many tend to think of more traditional asset classes, such as publicly-traded stocks and bonds. This is partially because, historically, investors didn’t have easy access to alternative asset classes, such as private equity. But, times are different now and many alternative asset classes are available to accredited investors through online investment platforms, such as equitibee...This unique access to alternative asset classes allows you to diversify your portfolio and further protect your investments from downside risk. There are alot many things which we can do for indian ruppee to be appreciated.

NAME- ARYAN SANGHVI

STD- SYBA

DIV- A

ROLL NO -57

ID CARD NO 1220210721

What is the meaning of"falling rupee"? - A fall in the rupee against dollar in the forex market means that the Indian currency is weakening.(this means while importing from U.S or other countries India have to pay more becoz payment is done in dollars ... In simple words less import cost more.) Major Reasons:- Rise in crude oil prices . Russia-ukraine war. Foreign investors withdrawing from Indian market & monotonous environment of domestic business. Global factors such as ongoing Russia-ukraine war , soaring crude oil prices and lightening of global financial conditions are among the key reasons are the among key reasong of weaking of the Indian rupee against the dollar .Indians exposure to to high energy prices has. Had knock-on effects on the currency , with the rupee falling more that 5% against the dollar year-to-date. The Indian rupee has came under intense selling pressure due to a perfect Strom of global headwinds . Major Impacts:- Inflation:- A weaker rupee will directly impact India's trade balance & inflation through higher cost of imports . GDP:- weaker rupee will make there imports more expensive, which will have a short term negative effect on GDP as whole. Measures:- Reduce inflation competitiveness. (If possible)Sell foreign exchange assest. Policies .

1)The foremost reason for the currency's downfall is the money being pulled out from the Indian economy by foreign portfolio investors. 2)Another reason for the rupee's fall is the rising dollar index. If the index rises, the value of other currencies falls 3)Impact of war: The fall in the value of the rupee can also be attributed to a rise in the prices of commodities due to the Russia-Ukraine war. Russia and Ukraine are major suppliers of items like oil, wheat, and fertilisers. With much of the supply being halted due to the war, the prices have gone up, and India’s import bill has shot up. Measures to improve value of rupee: The RBI has been taking several steps to stop the depreciation of the rupee. It has removed the cash reserve ratio and statutory liquidity ratio limitations on foreign cash non-resident bank . It has also allowed a higher interest rate on the NRI deposits. The central bank may buy back the bonds from the market to increase the rupee supply. This might help it bring down the value of the dollar. Also, one of the other ways is to suck the liquidity out of the market. This can be done by hiking the interest rates. If the bank interest rates are higher, people tend to deposit more in their banks, reducing the liquidity.

Reasons why rupee value is falling in the international market-

Ukraine-Russia war has disturbed energy trade{ crude,gas trade} sansation imposed on Russia/Iran and Venezuela who are major exporter of crude oil and gas has created scarcity of crude supply gas supply leading to sharp rise in the prices of the same, increasing prices of fuel increases the outflow of foreign currencies as we need to pay more for the import.

Ukraine war has also resulted in obstacles in supply of food products for example 80 percent of the wheat requirement is fulfilled by Ukraine, due to Russian blockade and war this supply was disturbed till now this led to increase in the prices of food grains and food products which in turn increase the outflow for foreign currencies.

Since covid the supply chain of raw material and finished products was broken. This led to reduction in supply and increase in the demand causing the prices of raw materials to rise and in turn causing rise in final product .

One of the major cheap price exporter China ;Chinas economy is slowing down due to their banking sector defaults/fraudster this in turn has reduced their supply of raw materials and Final products. Revival of the US economy led to increase in rate of interest for deposit etc. has led to migration of other international investment from immerging economy’s like India to USA this has strengthen the us dollar.

Rise of domestic inflation in India due to increased crude prices and disturbed supply chain this has led to widespread price rise causing devaluation of purchasing power of rupee.

Immediately after covid the RBI has taken measure to increase the liquidity in the market to boost economy however this with the reasons above led to rise in inflation now to control the inflation RBI has increased interest rates this has reduced liquidity in the market and less funds are available for investment in the market and the cost of lending of money has increased.

Foreign investment funds have felled out of the Indian market to markets like US which offer better returns.

Impact on the Indian economy-

Investment will reduce, slowing down the growth , enhanced import bills will lead to greater outflow of foreign currencies out of the country increased level of unemployment widespread price rise, social unrest.

Ways to improve the value of rupee-

· Increase exports

· decrease imports

· built up strong foreign reserve in dollars

· moderate and regulate inflation

· proactive RBI measures

· consistent economic policy

· political stability

· enhancing production and supply of good and service

· generating more employment

· reducing the reliance on US dollar based trade by encouraging country specific currency trade agreements such as rupee ruble trade agreement with Russia

Fall of the Indian Rupee in International Market.

-The rupee has plunged nearly 6.5% since the start of the year and the fall is mainly due to high crude oil prices, a strong dollar overseas, and foreign capital outflows. A stronger dollar and weak domestic growth prospects is leading investors to flock to safe greenbacks, ditching riskier Indian assets. The US dollar has been strengthening as global investors piled on the safe-haven currency with the US Federal Reserve tightening monetary policy more than peers. Risk aversion in global markets means funds are now flowing back to the US.

Impact on the Economy:

-Since India mostly depends on imports, including crude oil, metals, electronics, etc. the country makes payments in US dollars. Now if the rupee is weak, it has to pay more for the same quantity of items. In such cases, the cost of raw materials and production goes up which gets passed on to the consumers.

On the other hand, a weakening domestic currency boosts exports as shipments get more competitive and foreign buyers gain more purchasing power. However, in the current scenario of weak global demand and persistent volatility, exporters are not supportive of the currency fall.

The falling rupee's biggest impact is on inflation, given India imports over 80 per cent of its crude oil, which is the country's biggest import. The global crude prices have sustained at over $100 a barrel since Russia's invasion of Ukraine in February this year. High oil prices and a weaker rupee will only add to inflationary pressures in the economy.

Measures:

1. Export more goods and services

2. Reduce Imports drastically

3. Have Current and Capital account surplus

4. Go for import substitutes

5. Popularise RuPay (indigenous card) where in Foreign Exchange outgo is not there.

6. Attract more tourist

7. Attract more and more FDI with condition that there will be moratorium for remitting profits outside India for at least 5 years.

Why Indian rupee is falling in international market?

The value of the Indian rupee to the US dollar works on a demand and supply basis if there is a higher demand for the dollar the value of the Indian rupee depreciates and vice versa

In July Indian Central Bank put in a place mechanism for international trade settlements in the Indian rupees the measures allowed traders to bill, pay and settlement imposed and exports using the Indian rupees which will help a long-term goal to international the Indian currency

On Wednesday the rupee hit a record low of 79.03 against the US dollar it has decline nearly 6% scenes January this year

HOW IT GOING TO IMPACT OUR ECONOMY

India mostly depends on import including crude oil metals electronics etc the country makes payment in US dollars now if the rupee is weak it has to pay more for the same quantity of items in such cases the cost of raw materials and production goes up which gets passed onto the Cunsumer

On the other hand a weaking domestic currency boost export as shipment gets more competitive and foreign buyers gain more purchasing power however in the current scenario of weak global demand and persistent volatility exporters are not supportive of the currency fall

A waeker rupee will make these imports more expensive which will have a short-term negative effect on domestic production and GDP as a whole

The biggest impact of a weaking rupee is inflation given India imports more than 8% of its crude oil

SUGGEST MEASURE TO IMPROVE VALUE OF RUPEE

Exports more goods and services reduce imports drastically have current and capital accounts surplus go for import substitutes attract more tourist attract more and FDI with condition that there will be moratorium for remitting profit outside India for at least 5 years political stability is ensured make efforts to make the country a develop nation from developing nation

The fall in the rupee against the dollar in the forex market means that the Indian currency is weakening. This means, that while importing from the united states or any country, india will have to pay more because the payment is done in dollars i.e, less import cost more.!

. SECTORS BEING AFFECTED

India imports 20.96 percent of the GDP. It includes mineral fuels, oil, mechanical appliances, jewellery and many more. As all these imports are done in dollars so the weakening of the indian currency against the dollar is overall effecting these sectors.

The one more main reason in fall of rupee is the

rise in :- 1. Crude oil prices

2. Foreign investors withdrawing money from the indian market.

3. Monotonus environment of domestic

business.

HOW WILL IT EFFECT YOU AND MAJOR IMPACT ON OUR ECONOMY.?

The devaluation of the rupee will make imports costlier. Since, the rupee has weakened against the dollar, importers will now pay more for the same quantity and price. People who are aiming to study abroad during this time would see an increase in the amount of the fees. People residing abroad who send money to their families in india would cost more in term of the rupee. On the other hand, the depreciation of the rupee makes exports cheaper.

The falling rupee's biggest impact is on inflation given india import over 80 percent of its crude oil, which is the country's biggest import. The global crude prices have sustained at over $100 a barrel. Since, russia's invasion of ukraine in february this year. High oil prices and a weaker rupee will only add to inflationary pressure in the economy.

. MEASURES TO IMPROVE VALUE OF RUPEE

For getting hike in export its good, so india should focus on producing more furnished goods to export like US market. Even china is also under pressure of lockdown and covid and ukraine russia in another tension. Now its high time and good chance to become global exporting power in the world and in near future becoming powerful economies among all.!

Why Indian rupee is falling in international market: Indian rupees is continuously depreciating up to it's historic low. i.e.,1 dollar= 80 rupee. This fall is bad for the economy and it comes at a time when we are fighting inflation. Indian Rupee has depreciated 25% since 2014 against dollar. all major currencies around the world are falling. Not only Indian rupee but also every other currency has taken a big hit by US dollar except Chinese Yuan. why Chinese Yuan is not depreciating like other currencies. Because China has done record high level exports last years. Due to this China has done great against dollars.

Why is it going low ?

1. The geopolitical tension arising due to the Ukraine-Russia conflict. The crisis has pushed up the price of essential commodities worldwide. Crude oil prices are also soaring high and India is witnessing a sharp rise in its import bill.

2. India’s forex reserves have dropped down significantly. Forex reserves dipped by $2.695 billion to $597.728 billion, according to the Reserve Bank of India's weekly statistical supplement

3. A lot of overseas investors have pulled out a huge amount of money from Indian markets. This has affected the market sentiment and decline.

How is it going to affect us ?

1. Imports will be expensive and exports will be cheaper.

2. Oil imports will become more costly.

3. Education in foreign nations will become really expensive.

4. Travelling international will become expensive.

5. Increased interest rate on loans.

6. Inflation.

7. VOLATILITY IN STOCK MARKETS.

Measures to be taken:

1. Reducing oil import: investment in methane hydrate(which will be the biggest source of energy in next decade and India has plenty of it).

2. Fiscal stimulus to boost foreign tourism business resulted in increased inflow of foreign exchange.

3. Import has to be reduced/curtailed

4. Export must be increased

5. Import duty on non essential items be increased

6. Barter trade i.e. import should be in Indian Rupee so that there is a matching import by the same country from where imports are made.

Measures to improve value of rupee:

Measures to improve Indian rupee: •Stop black marketing •Stop corruption •Ban on Import Items We need to stop importing items from other countries, as importing from other countries lead to more taxes to be borne, more customs, and price of the same will be double or triple than the actual price. At the moment India depends on oil and other raw materials which are imported from other countries. India should not buy any low value items or products from other countries which has no added value to Indian Markets. •Produce large quantity of Indian goods, and export them to the right country, where their is shortage of that goods. •We should improve inflow of foreign currency in India by improving the tourist spots and maintaining them properly to attract foreign tourists. India has some of the most beautiful places in the world and it is important to maintain their sanctity. •Increase our export trades by producing higher quantities of Indian goods that are in demand abroad. We also need to start manufacturing or producing new stuff that is in demand abroad. •Indian citizens should themselves feel responsible and try to purchase only Indian goods. Wherever possible, we should avoid buying stuff from abroad.

Impact on our economy: The value and performance of a currency have a huge impact on its economy, as the currency performs well the economy performs well, and vice-versa. A fall in the value of the Indian Rupee badly affects the economy as the rate of inflation increases in the country. However fall in the currency improves the exports of the nation as it becomes cheaper for foreign buyers, but as per the current scenario, there is a huge reduction in the overall global demand. Thus the total exports from the nation also decreased contributing furthermore to the fall of the Indian rupee. With the fall in the Indian rupee, the MSME sector gets badly impacted and thus resulting in job losses and increases unemployment.

Why Indian Rupee is falling in international market?

On 19 july the lndian rupee hit as low all time exchange rate of 80 against the US dollar in early trade the government said that it's value had fallen by 25% since 2014. The country is already grappling with high inflation and weak growth now this fall of the rupee has become a cause of concern and a challenge for policymakers. The rupee fall had been mainly due to a rise in crude oil prices a strong dollar overseas and persistent foreign capital outflows the backdrop of heated inflation prolonged by lockdowns in China the monetary tightening campaign of the central banks and supply chain disruptions caused by the Russia Ukraine war have led to the steep fall of the rupee against the dollar. In simple terms, a high import bill leads to a depreciation in the value of the rupee as the payments are made in US$, reducing the availability of dollars in the domestic economy.

Reasons:

The biggest one by far is the flow of capital to the US.The US is usually an exporter of capital. It imports more than it exports. Its rich citizens invest abroad to increase the returns on their portfolios. Immigrants working in the US send money back the home countries.

A country receiving significant capital from the US via exports, foreign investment (both FII and FDI), remittances tourism, etc, can run a deficit in their current account. This means it can import more than it exports. They can do this due to the cushion offered by all the money flowing in.India has been a huge beneficiary of this trend. It has historically manged to maintain a current account deficit within a narrow range since 1991. It has not had too much of a problem funding it.

Of course a natural outcome of this is a steadily depreciating currency. This is not a problem in good times when money is flowing in. In fact even if money is flowing out, it's still not a problem as long as the currency is stable and the current account deficit is low.

This was the case with India in FY22. The current account deficit was low at 1.2% of GDP. The rupee was relatively stable. FDI was flowing in. The growth in exports was strong.

Speaking to Business Standard, Rahul Bajoria, Chief Economist, India and the Antipodes, Barclays Investment Bank said rupee is not being singled out in terms of weakness. Chinese yuan, Korean won and Japanese yen fell more than rupee in last 3-4 months, he said adding that several Asian currencies have weakened across the board.

The biggest impact of a weakening rupee is on inflation, given India imports more than 80% of its crude oil, which is India’s biggest import

Measures to be taken:

-We need to start manufacturing or producing new stuff that is in demand abroad.

-Indian citizens should themselves feel responsible and try to purchase only Indian goods. Wherever possible, we should avoid buying stuff from abroad.

-We should encourage more FIIs to invest in Indian Stock Market.

-We should improve inflow of foreign currency in India by improving the tourist spots and maintaining them properly to attract foreign tourists. We should promote Indian tourism on a global level as much as possible.

-We can make use of the Indians who are settled in different countries of the world. India has some of the most beautiful places in the world and it is important to maintain their sanctity.

-We should bring back all the black money of corrupt politicians and businessmen from Swiss bank accounts. This money should be utilized for the betterment of our own people as well as for innovation.

During pandemic we have lost many jobs,money,share market crush not only in domestic market but also in international market as well and that have affected the economy. As rupees is falling day by day and international market's rupee is falling due to the rise in i)CRUDE OIL. WTI( west taxes intermediate) is 90.57(-0.21%), Brent crude oil is 96.57(-0.20%), murban crude oil is 96.37(+1.96%), and natural gas is 7.675( +1.13%). ii) FOREIGN INVESTORS- Foreign investment invest to the domestic companies and that benefits go to the another part of the country by the Foreign investors. Crude oil also continues to be risen the levels (it imports more than 80%) and foreign investors has pulled out many money's in the year 2009-2021. Yes, definitely it will affect economy because the loss of jobs there will be loss any how. A weaker rupee will make these imports more in risen amount, which will affect on domestic products and gross domestic on a whole. There will be no employment in the country,no education and somehow it will affect the economy because in Economy market 'PROFIT IS THE MAIN THING'.

PROFIT

Due to that the biggest impact of rupee is Inflation (increase in prices fall in purchasing the value of money).To improve the fiscal and monetary authority we must interact with the people's for knowledgment about the fields. Today's world have digital media,trade and finances, migration and worldwide communication (interaction), competitions, today's generation must have more innovative solutions eg- i)through digital media or technologies there are many ways to improve the economy and make success.ii) To improve the international economy or domestic market their should be co-ordination amongst peoples. Who are managing the systems, about funds, accounts, who much to be invest and how much funds or shares are invested, how much profits we did today etc. These many solutions and measures I will suggest to improve the economy. Thank you!

Why Indian is Rupee falling?

The major cause that should be held accountable for the fall of the Indian Rupee is Inflation. Inflation is a rampant issue now throughout the world in almost all countries. This is caused by money printing by Central Banks of all countries during the Pandemic. The US just hit 9.1% inflation last month levels not seen in the last 40 years. There are $3Trillion dollars in Handout and stimulus money handed out to small businesses immediately after the pandemic to keep things going. This excess money is the root cause of high demand. Of course, there is a supply issue too. Gasoline prices are up 40%, Food energy and rent up 35%. Most countries are trying to restrict the money supply by increasing the Interest rate which will increase the risk of recession. So, it’s going to get ugly everywhere, especially in the west. If there is more money in the economy, i.e., consumers have more money in their hands, they will want to buy more goods. When demand increases, prices will also go higher, thus resulting in inflation.

Impact on economy:

A weaker rupee will make these imports more expensive, which will have a short-term negative effect on domestic production and GDP as a whole. Given that over 80% of India's crude oil is imported, inflation will be the most affected by the rupee's decline. While a weak rupee raises the price of imports, it also has some advantages. In theory, it increases the competitiveness of our exporters. In addition, a significant portion of India's major exports, including gems and jewelry, petroleum products, organic chemicals, automobiles, and machinery, are imported. The cost of production for exporters will increase due to rising commodity prices brought on by supply shortages, which will have an impact on their margins. As a result, industries like electronics where there is a high import intensity may not see an increase in exports. It is true that labor-intensive export industries like textiles and service sectors like IT will profit.

Measures to improve the value of rupee:

The decision by the government to allow foreign investors to directly invest in Indian equity could bring some capital flows and have a positive impact on the economy and the rupee.

A weakening rupee is needed to increase the competitiveness of the domestic industry is valid since exports tend to benefit from a falling exchange rate. Government should tap this opportunity to increase exports.

Methanol blending to 20% petroleum can decrease the import receipts leading to a strengthening of the rupee.

India needs to convince the USA regarding its Import of oil from Iran as India can trade with Iran in Indian rupee instead of the dollar, leading to a strengthening of the Rupee.

Creating new jobs and employment will increase the growth of the economy. Tapping the potential of demographic dividend and the MSME sector to export will strengthen the Indian economy and the belief of foreign investors in the Indian market.

Dear students you are required to discuss on the topic. I can see all of you have only putforth their view but you can comment & should discuss on views published by your friends here. Then it becomes Arthmanthan in true

From around Rs. 26 in January 1992 to about Rs. 77 in March 2022, the value of the rupee has decreased. The rupee has lost value versus the US dollar on average by 3.7% a year. The steady depreciation of the Indian rupee is never a major worry, though. However, it is a worrying situation if the rupee is falling quickly. The rupee's depreciation of more than 3.3% during the previous three months is quite alarming in that setting. Additionally, there are two main causes of the rupee's decline: 1. Foreign investors are pulling out of Indian markets in response to the US Federal Reserve's move to raise interest rates there and the conflict in the Ukraine and Russia. They receive money in rupees when they redeem their investments in India. However, they must exchange their rupee-based holdings for dollars. As a result, they will purchase dollars in exchange for rupees. As a result, demand for the rupee decreases and demand for the dollar increases. As a result, the Indian rupee loses value in comparison to the US dollar. 2. Increase in dollar purchases as a result of the rise in oil prices: India is a net buyer of crude oil. Indian businesses must spend more money because the price of oil has increased globally by more than 60% since 2022 began. There will be more demand for dollars, which will cause the rupee to weaken.

The rupee has been depreciating against the dollar in the international market for the past few months .The situation has been aggravated by two years of economic collapse due to covid ,war between Russia and Ukraine increased investment in dollar in international markets.

The situation will have the following effects:-1)Oil prices will rise.2)Increases Prices of Petrol and Diesel 3)The expenses of students studying abroad will increase 4)The rate of inflation will increase.

Some measures can be taken to change this situation-i)The food culture of India is famous all over the world.If we emphasize on this by doing something like food exhibition food fair,we will good market in other countries.ii)Ayurveda is our culture and tradition,We have convinced the world of its importance and if we increase the sales in the global market,the value of the rupee will increse.iii)Attracted foreigners by improving tourism iv)Dissemination and promotion of handicraft village industry clothes will generate income. V)While manufacturing large cars,sourcing spare parts from foreign countries makes it expensive,so we should focus on indigenous cars.

Since the beginning of 2022, the Rupee has depreciated around 6% to the US Dollar, with several reputed firms predicting a further fall of around 1-2%. The pandemic, flowed by the Russia-Ukraine war have created a severe supply shock globally, giving rise to inflation, and increase in prices of several key commodities that India imports such as crude oil. We compare the rupee to the dollar, since the dollar enjoys the status of an international currency and so is linked with any form of international trade. This fall in the value of the rupee is due to the rising costs of commodities, that add to the strain that is India’s current account deficit, as we import more commodities at an ever increasing price, while our the value of our exports struggle to grow at the rate at which that of our imports do. The rise in the value of the Dollar due to the aggressive interest rates put forward by the federal reserve has also had a negative impact on the value of the Rupee, since most investors are putting their money on the Dollar as a safe haven, and money flows out of India. The biggest impact of this weaker rupee is inflation, as we import more and more, at a more expensive rate, the prices of goods keep getting higher and higher, and this adds a further strain on the currency. A little over 65 percent of our imports are fossil fuels, they are also called multiplier commodities, as inflation in their prices would cause inflation across other types of commodities as well, for example food, clothing, etc. This makes the general expenditure of an average household also increase. Another impact of this would be on the ever increasing overseas debt, as more amount of the currency would have to be spent in order to repay it. A general trend in the markets would be that importers suffer, while exporters thrive. An optimist would say that these are just temporary trends and that everything will normalise soon, preventing further decline. The RBI too has taken few precautionary measures, and has also helped reduce any risky movements of the Rupee. In order to improve the value of the rupee, the government must make some policies in order to attract foreign investment, as well as remedy the impact covid has had, in order to show them that it is a safe place to invest, as well has help the economy grow.

Dollar is getting more expensive and rupees falling day by day!!

When India got its independence in 1947, value of one dollar was equal to 3.3 INR. And now, after 75 years one dollar is equal to approximately 80 rupees. What could be the reason behind this?

There are only two forces acting upon it demand and supply. Indian currency is devaluing because of foreign capital flow, current account deficit and rising oil prices due to Russia and Ukraine ongoing war. But even if we see Indian currency is performing much better than many countries like Bangladesh which had fallen upto 8.2% or Chinese Yuan that depreciated 5.7% and India is surviving at 5% currency depreciation.

In 2022, till now 200,000 cr foreign investment share was sold and the money they received was converted into USD to export,which caused Indian currency value to fall more.

The negative impact of falling value is that we imported 86% of crude oil from other countries.So if dollar gets more expensive we would import same amount of crude oil much costlier than before. Also the tourism cost and education cost will increase.But on the other hand if we see, if the Indian currency falls India's export will be cheaper which means better competitive price which will result into more exports and will create job opportunities.There will be more foreign investment.

To increase the value of Indian currency, Indian government should take certain measures like promoting more tourism which came to halt due to pandemic. It will bring foreign capital in our country. Also, they should encourage more investments along with making favorable policies for foreign investment.

In around 1950s, many countries followed this strategy to strengthen their economy. In short run, it may lead to inflation but in long run it could be good cause for economy.

The rupee has become one of the worst performing currencies all over the world with a 5% depreciation. With the world talking about the global recession the value of the rupee among various other currencies is falling continuously. Some reasons for this depreciation are-

The Ukraine-Russia War crisis has hiked the prices of crude oil which has, in turn, affected the value of the Indian currency

Current Account Deficit: The gap between imports and export is increasing. Imports are increasing continuously and exports are not able to catch up with the speed of increasing imports.

The IPOs that started investing in India are now withdrawing their investments looking at the falling markets in the country.

Some steps are:

· As a country, we need to take steps to justify the value of the Rupee as a currency.

· After Covid-19 tourism in our country came to a halt. We need to find a way to boost tourism in India, which will bring in more dollars and help increase the value of the Indian currency.

· Encourage businesses and investments in the country.

· Proper policy-making and removal of unnecessary taxes.

Especially since the pandemic, the Indian economy, and by proxy the value of the Indian rupee, has taken a major blow. While all economies are slowly making their way towards the road of recovery, India still has a long way to go to strengthen the position that it has in the global economy. Among the developed and democratic countries, it has not only the highest population but also an intricate and delicate economical structure and hence has faced several problems that are infinitesmally more complex than the other countries.

Countries like the United States of America have since been able to regain economic stability and go on to thrive in the global market yet again due to the fact their there is little government interference and checking in place for businesses which are contributing greatly to the GDP and employment rates in the country. They are also able to adopt aggressive means in order to improve business conditions thanks to the capitalistic nature of the economy. On the other hand, majority of the steps being taken by the Indian government in order to improve the Indian economy are currently welfare based, not wealth based.

While this is helping people to slowly regain their balance, the global economy has become more cutthroat given the war waged on Ukraine which has not only placed India in a tricky position in the International Relations sphere, but also caused a further lag in the value of rupee due to the increasing prices of crude oil. Due to the fact that India relies heavily on imports for several commodities that are facing an inflation in the global market, there is a possibility of increased public debt, both domestic and international. While public debt in the short run may lead to some economic growth, a research paper published by Ranjan Kumar Mohanty, Sidheswar Panda in Margin: The Journal of Applied Economic Research, talks about how public debt affects the Indian Macroeconomy in the long run, where it states the adverse impacts of debt on economic growth, which is surprisingly hindered more by domestic debt. This could also lead to cutting back on necessary infrastructural development expenses which could drastically affect the already dwindling public morale.

Some of the steps that can be taken to improve the situation are:

1) Encouraging businesses, which would in turn increase GDP and employment rates

2) Attracting foreign investment in public and private ventures

3) Adequate policy making

4) Channeling funds in the right directions and cutting back on unnecessary expenses, prioritising economical growth

Not long ago Indian rupee hit its all time low against dollar at Rs. 80. The currency has since regained some ground and is currently around Rs. 79.57 to the dollar. But what is the reason for this? Since the war in Ukraine began, and crude oil prices started going up, the rupee has steadily lost value against the dollar. There are growing concerns about how a weaker rupee affects the broader economy and what challenges it presents to policymakers, especially since India is already grappling with high inflation and weak growth.

The depreciating Indian currency negatively impacts the Indian economy. The biggest impact of a weakening rupee is inflation, given India imports 80% of its crude oil. Depreciation also reduces the value of a country’s currency when compared with the currency of other countries. Discouragement of imports as imported goods become more expensive due to a reduction in the value of rupee is also a victim of depreciation. As the goods become more and more expensive it leads to rising inflation.

To combat this depreciation and increase the value of the currency, one has to think that its demand should be increased on the same line. The demand of the currency will only increase when people try to buy products from their own country. We need to start buying Indian products, manufactured by India and the profits should be shared in India rather than other countries. Decreasing imports from foreign countries, hence, not depending as much on them, furthermore, encouraging FIIs to invest in Indian Stock Market will also help in increasing the value of Indian rupee.

We, the students of TYBA Economics had given an internal test recently which is suppose to cover 10 marks in our internals.

This test was conducted for 20 marks which means that our total marks will be divided by 2. While writing the test we didn't realise that only half of our marks will be considered. But a lot of my classmates were expecting 15 marks or so out of 20 which is not our real marks.

This situation is similar to inflation. Numbers (prices) are increasing but the real value (real GDP) is the same. As the inflation rate rises people's income increases, they feel more rich and spend more this results in producers producing more by employing more factors of production (Real GDP increases). As Keynes presumed in contrast to classical school inflation can occur even when the economy is not operating at full employment level. People fail to realise that the value of their money or purchasing power in terms of commodities change when prices rise, this is called Money Illusion.

In conclusion, authorities should not to depreciate value of Indian rupee by over controlling inflation rate, however, economy with zero inflation rate will sooner or later collapse.

Prathamesh Futane

TYBA Eco,

Roll no. 9

As all we know the prices of each commodity is increasing day by day in india. It seems to be mostly affected in the field of indian economy and in international market.

Did we thought why it is being effected so badly..?

Some reason's are follows:-

As we can see due to increases prices in each and every things....there is increases in expenditure and decrease in income As people can't able to save much with them...and also due to decrease in employment sector's which is becoming unstable, Due to covid-19many things got sifted and disbalance in the country and we have see drastic impact on economy .so this are some smalls reason's of same. ...

Now coming to the main content of the topic ....!

As showing on the recent updates on the following situation:-

The statement that the rupees has fallen to a low of 8p dollar's which means that the one needs to 80 rupees to buy a single dollar....!!!

India trade deficit widened to a record of low usd 31.02 billion in July compared to usd 26.18 blion in June. As rupee records low of 79.03 against the us dollars. So basically if we say in simple terms so when a country imports more than it exports the demand for the dollars will be higher then the supply and the domestic currency like rupee in india depreciate against dollars.

Disappointing macroeconomic data from India may continue to mount downside pressure on the rupee. However weak crude oil prices and inflow from foreign investors may cushion the downside.

Futher looking at the effects of the same. ....

1) As money flow out of India the rupee dollars exchange role gets impacted on depreciation puts consider pressure on the already high import price of higher imported inflation and production costs beside higher retail inflation.

2) The crude oil prices impacting the indian rupees because the country is highly dependent on crude oil imports meeting 80% of its energy requirements.whenever oil prices see increases it tends to pressizes the rupee as india import Bills over higher crude prices.

3) weaking domestic currency boots exports as shipments gets more competitive and forget buyers gain more purchasing power.

Measures that have taken to improve are follows:-

1. To increases good relation with foreign investment and to make it liberalized.

2. To increases foreign exchange inflow into the country.

3. Increases tourism sectors as much as possible to increases profit for the country.

4.Government should remove un required taxes and should conduct free flow of goods and services for foreign investment.

The Indian Rupee is continuously falling against the US dollar. Recently, it fell to 80 against dollar, however in the end it closed at 79.56. This rate i.e. foreign exchange rate is decided by market forces - demand and supply.

Falling rupee means a fall in the rupee against the dollar in the forex market i.e. the Indian currency is weakening. This means that India have to pay more while importing as payment is done in dollars. There are many reasons for the falling of Indian rupee. But there are three main reasons why rupee is falling and they are

1) Capital outflows - this means that people are selling the Rupee and buying foreign currency.

2) Rising prices of crude oil - If oil prices increases, then we have to buy same quantity of oil in more price.

3) Current Account deficit -

That is the gap between imports and exports is continuously rising. Import are continuously rising while our exports are not rising at the same speed of import.

Covid-19 pandemic, Russia Ukraine War has also affected to falling rupee.

Due to this reasons, Indian economy has also affected. Falling of rupee makes imports costlier. India mostly depends on imports for goods such as oil, gas, electronics, energy, etc. and its has to pay in dollars. So all this expenditures are indirectly transferred to consumers. Also inflation is impacting falling of rupee On other hand, depreciation of rupee will make export cheaper.

As a country, we need to take steps to justify the value of rupee. For example RBI and government can make policies to increase rupee value. Exports should be promoted, foreign investment should be increased.Also tourism should be given attention. Covid-19 had affected tourism a lot, people from outside India have stopped coming to India which international stopped US currencies coming to our country as well. There are many ways to improve the value of rupee and these are some among them.

Nidhi Kulkarni - 1220210712

On Wednesday, the rupee hit a record low of 79.03 against the US dollar. It has also declined nearly 6 per cent since January this year. • The value of the Indian rupee to the US Dollar works on a demand and supply basis. • If there is a higher demand for the US Dollar, the value of the Indian rupee depreciates and vice-versa. There are 'n' number of reasons such as: 1) Inflation Prolonged 2) COVID-19 lockdowns in China. 3) Capital Outflow 4) Due to high crude oil prices. 5) Supply chain disruptions caused by the Russia-Ukraine war. 6) If a country imports more than it exports, then the demand for the dollar will be higher. 7) The US Federal Reserve recently increased the interest rates. How does it impact? 1) India mostly depends on imports and make payments to the US but if the rupee is weak, India has to pay more for the same quantity of products. 2) In these cases, the cost of production goes up which impact the cosumers to pay higher price. 3) The falling rupee's biggest impact is on inflation. 4) High oil prices and a weaker rupee will only add to inflationary pressures in the economy. Will the RBI intervene further? • There are chances that the central bank may intervene further as the rupee sees a further decline. • Last week, RBI Deputy Governor, Michael D Patra said "We will stand for its stability and we are doing it. We are there in the market and we will not allow disorderly movement of the rupee. We have no level in mind, but we will not allow jerky movement. That is for certain". Measures to improve value of ₹: 1)Increase FDI cap in defense, insurance, railways and other sectors. 2) Lure the foreign investors by making business friendly policies and by offering incentives for investment. 3) Curb the demand of gold by hiking import duty on gold and other jewelry items. 4) Boost the tourism industry as it would bring dollars into the Indian market. 5) Retrospective taxation issues needs to be resolved (Vodafone case). 6) Simplify the tax structure. 7) Labor laws needs to be modified: Allow late night shifts for women, rationalize working hour restrictions. 8) When rupee is low against dollar, Indian products become more competitive in the global market. Capitalize those situations by promoting exports. 9) NRI citizens can play a role by pumping in foreign remittances when rupee is distressed.

After 75 years of independence, the rupee has fallen by Rs. 75. As of July 2022, $1=Rs. 79.54 (80 approx.) . the main reasons for depreciation of rupee include:

1. Covid-19 pandemic: the three waves of the pandemic, resulting in three lockdowns have not only affected the rupee, but also other currencies. further, the declining exports (except medicines and vaccines) and imports have drastically increased the demand for foreign goods, thereby depreciating the rupee.

2. Import dependence: despite the Atmanirbhar Bharat initiative and other entrepreneurship development initiatives, Indian start ups are in their nascent stage, and competition from MNCs have held them back from ascertaining their market share.

3. Import dependence in the Power Sector: India is dependent on USA, Russia, Gulf Countries, and others for its coal and crude petroleum. Volatility in the prices of crude oil due to the Russia-Ukraine conflict, clubbed with coal crisis domestically, has led to depreciation of rupee.

4. The US Fed taper: in order to control inflation in light of the above mentioned incidences, the US Fed has tightened its money supply, once again, with the first one being in 2013. Hence, with a lower supply but higher demand of dollars, the rupee has devalued.

Despite the fact that depreciation of rupee makes it more competitive, cheaper, and favours exports, it must be kept in check with the following measures. These include:

1. Depreciation of rupee can be kept in check with import substitution.

2. Implementing the Atmanirbhar Bharat Campaign in full force can play a vital role in promoting the exports of Indian made goods.

3. The power sector can be made self-reliant by increasing our renewable energy capacity, which we are successfully attaining.

Recently, the Indian rupee depreciated to its lifetime low value of Rs 80.05/$. You may be wondering why the rupee keeps on depreciating against the dollar. There are myriad factors at work for the same, I will explain some of them.

1. An interest rate hike by Federal Reserve: In response to the record high inflation in the U.S. following the low-interest rate regime, Fed (USA's central Bank) has increased the interest rate again. This increases the opportunity cost for foreign investors who invest in emerging economies like India. FIIs have already sold $3.2 billion worth of securities and are buying $s.

2. The dominance of the Dollar in international markets: Since Fed increased the interest rate it essentially means a lower dollar supply. Why? Because borrowing dollars is now expensive. But, 60% of international trade is settled in dollars and around 40% of foreign debt is issued in dollars. A combination of reduced supply and increased demand makes the Dollar more valuable relative to other currencies. That is why in 2022, compared to the U.S. Dollar, Euro is down 13%, the British Pound 11%, the Japanese Yen 16%, and the rupee is down 7%.

3. Skyrocketing Crude prices: India imports nearly 80% of its crude requirements. Because of the pandemic-induced supply shocks, the Russia-Ukraine war, crude crossed its $100 psychological mark and cost nearly $123/barrel in June 2022.

4. Current Account Deficit: India runs a current account deficit, that is we import more than we export. Because every trade (almost every) happens in U.S. Dollars, whenever we import we need to buy U.S. Dollars with our rupees. This increases the demand for the Dollar and on the contrary, increases the supply(liquidity) of rupees in the Forex market which decreases the value of rupees.

Impacts of depreciating rupee:

1. Makes exports competitive: Depreciating rupee makes exporters well off. How? Let's suppose I'm an exporter who exports products. I receive $100 for every product that I export. In June 2021 when exchange rates were Rs 73/$, I received 73*100= 7300 in INR for every exported product. Fast forward to July 2022 when 1$ almost equaled 80Rs I would have earned 80*100=8000. That is I as an exporter am better off by 700(8000-7300) due to the rupee's fall from 73/$ to 80/$.

This could be one of the reasons that contributed to record exports of $418 Billion in FY22.

2. Makes imports expensive: It is just the complete opposite of what happened to exports. Because of a weaker rupee, you need more rupee to buy dollars and use them for importing goods and services.

Measures to improve the value of Rupee:

To improve the competitiveness of the rupee, in the long run, India needs to follow USA's and China's Footsteps, that is India needs to promote its currency as a global currency. The government and RBI have already started working on that. We now import Russian oil using INR through the "Vostro" account. Iran, Venezuela, and UAE have already expressed interest to trade with us using INR. This will reduce our dependency on $ and thus somewhat the downside pressure on the rupee.

The value of the Indian Rupee against the US dollar works on the demand and supply factor. The rupee has fallen mainly due to a rise in crude oil prices , a strong dollar overseas and persistent foreign capital outflows. When a country imports more than it exports , the demand for the dollar will be higher than the supply and the domestic currency like Rupee in India will depreciate against the dollar. The rupee-dollar exchange gets impact by the outflow of money from India. High import prices of crude and raw materials , paving the path for higher imported inflation and production costs besides higher retail inflation. There could be more aggressive rate hikes by the US Fed and that may further dent the Indian currency.

India depends mostly on the import of metals, electronics , etc and we make payment in US dollars. We have to pay more for the same item as compared earlier because of the declining value of Indian rupee. This phenomenon will lead to an increase in raw material and production costs which will ultimately pass on to the customers. On the other hand weakening of domestic currency boosts exports as shipments get more competitive and foreign buyers gain more purchasing power.

Indian government should allow foreign investors to directly invest in Indian equity could bring some capital flows and have a positive impact on the economy and the rupee.

A weakening rupee need to increase the competitiveness of domestic industry is valid since exports tend to benefit from a falling exchange rate . Government should tap this opportunity to increase the exports.

20 % blending of Methanol with petroleum can decrease the import receipts leading to strengthening of Indian rupee.

Creating of new job opportunities will boost up the economy. We need to introduce more foreign investors in Indian market. These factors can increase the value of Indian currency.

As per the recent data, the rupee is down by nearly 6% since january. If the exports of our country exceeds imports, value of the rupee will be greater. thus, depreciating the indian rupee against dollar. In recent times, indian currency has been declining due to war, inflation, higher crude oil prices, etc. It has great impact on our economy as the cost of products which were imported are now passed on to consumers: This has negatively impacted our economy as the increasing cost of imported goods has been a burden to the consumers. There are many ways to bring the currency value up eg. By increasing exports and reducing imports, attracting more tourists, capital surplus, etc.

Cheryl.

There are multiple reasons behind Indian Rupee falling in International Market. The past 2 years of pandemic are pretty self explanatory regarding multiple currencies failing. If I were to list biggest factors behind Rupee failing, it will be as follows -

1. Covid-19 Crisis - India witnessed a deadly second wave of Covid-19 Delta variant which wounded the economy heavily.

2. Supply chain disruptions due to US - China trade war and Russia - Ukraine War.

3. Unstable crude oil prices which is one more effect of Russia - Ukraine War.

4. Foreigners pulling out their money. Many foreigners pulled out their money which reduced the foreign direct investment and capital inflows in the economy.

5. Loss making businesses - Some will say this is not a big reason behind Rupee failing but in opinion most of the highly valued startups are loss making companies which are laying off employees daily and aren't sustainable. Due to their failure, foreign investors are losing interest in Indian start up space. Venture capital funding has reduced, and even Chinese Investors are pulling out money from India.

6. Weak Global Demand - There is a persistent volatility in global demand due to which exports are not very supportive.

Other reasons include reduction in foreign reserve, semi conductor shortages, latest heat wave resulting in low agricultural growth.

If I were to suggest any measures then I would say India should focus on supporting profitable startups and welfare of sustainable businesses. Depreciation of rupees is impacting students studying abroad so its a high time India should recognize the problem in higher education and do something about it. India can also focus on tourism sector which was heavily impacted due to the Covid-19 crisis, I mean like its a good time to develop the tourism sector and attract foreign travelers. India should focus on international capital inflows to increase economic activity.