Effect of Rupees Depreciation
Rupee,
the currency of our country India, is depreciating against Dollar. Anyone can
remember that it was below 50 before few days but now it is above 60. Which
means now-a-days we have to pay more than 60 Rs. for 01 US Dollar $ which was
available for below 50 Rs. before few days.
Rupees depreciating in such manner is
very bad the economy of the country. India deals for lot many things in terms
of dollars. Some of the deals done in US dollar $ are:
(1) Govt. of India takes loans from World Bank
in Dollars only.
(2) Price fixation for the imports of goods are
done in US dollar $ only.
(3) Corporate sector is badly affected due to
the import done by them.
(4) Gold import
(5) Foreign loans are taken by lot many
companies.
(6) Import of raw materials done in US dollar
Almost all International deals are
done in US dollars only. All the deeds done in terms of $ will now need more
Rupees to be paid.
Rupees depreciation will result into
more Rupees outflow and less dollar inflow.
Affect on the economy will be very
bad, increase in CAD will also be seen, Govt. expense for the repayment of loan
taken from the World Bank will increase, interest burden for both Corporate and
Govt. will increase.
And some more important thing to keep
in mind that the depreciation in Rupees will lead to DECREASE IN VALUATION OF
THE COUNTRY.
Hope for the Best,
Our country should
not lose its valuation.
