Recently everybody is crying that Rupee (INR) is getting stronger and that is hurting not only the exporters but Indian Industries that compete against imported goods. But is it really the case?
If you look at the graph of INR vs Euro (or any other major international currency) for the past 2 years:
you will notice that Indian Currency has actually depreciated by a healthy 3% over the past 2 years. The recent rumors of Rupee weakening is not due to strength of Indian economy pushing up the prices but the weakness of the USD.
If the USA does not control its balance of trade (importing more than they can export) soon, then the dollar will fall further and further. It does not make sense for India to commit the same mistakes and artificially weaken our economy.
5 replies on “Is Indian Rupee appreciating?”
more than rupee appreciating the dollar is depreciating- rupee is still same in comparison to other currencies like euro
ok due to the rupee demand for fdi theres some very slight appreciation but hardly so
depends upon the fm and rbi policy
but yes even if the rupee floats partially
they cant hold it at peg forever! without a big loss
plus as other countries shed dollars we should not stock up on $ and support Americas economy artificially at the detriment to our own
for china it is different and they want to use it as the c bomb
INR vs Rupee???
U mean INR vs Euro i think and not USD cause i see the graph as EURINR=x
When most of your exports are against the USD and the trade that you do is in USD then it does not matter what EURO stands against you.
thanks for pointing out the typo.
yes with continued negative balance of trade, the US economy is in Dire Straights… the dollar would have fallen to half of its levels if the asian economies stop relentlessly buying USD.
however what I fail to understand is when the whole world is trying to shed USD out of their foreign reserves and go for a basket of currencies (read Euro) why is RBI buying USD and artificially weakening the Rupee?
A strong rupee will help the country in so many ways.. there will be more and more FDI, indian companies will go for ECB (external commercial borrowings) and the new india will see a lot of economic activity.
damn anonymous was me 😀