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Why the Value of Rupee is decreasing and dollar is increasing ?

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  1. #1
    RakeshVed's Avatar
    RakeshVed
    RakeshVed is offline eTI Member

    Why the Value of Rupee is decreasing and dollar is increasing ?

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    Every day I see that rupee is getting down down and down. Today was more than Rs. 48 = $ 1

    Why it is so . Please explain.

  2. #2
    RakeshVed's Avatar
    RakeshVed
    RakeshVed is offline eTI Member

    Re: Why the Value of Rupee is decreasing and dollar is increasing ?

    No one yet ?

  3. #3
    Ricky
    Ricky is offline eTI Silver

    Re: Why the Value of Rupee is decreasing and dollar is increasing ?

    Well, may be I can't answer it properly but I will try. In simple words, the value of any currency depends upon its demand. In other words, its simply matter of demand and supply. Since, recently we were high on stock index and hence Rupee was over valued. As stock market crippled recently, FII and FDI took away their most of the investment and resulted in lesser demand of rupee.
    Also, in beginning there was no easy convertible world wide currency but still dollar was one of the most convertible currency hence banks etc. started to take it as standard which in result made it world wide acceptable as well more demand for it.

    Also value of a currency depends upon PPP ie. Purchase Power Parity which decides the cost of good in various currency or how much is spent to buy a good.

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