Saturday 26 October 2013

Causes of Rupee Depreciation

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1.Current account deficit:- The increasing demand of dollar and other currencies are making rupee weaker day by day.

2.US - Back on track:- after an slowdown in American economy, US is back on track making rupee sink.

3.Slowdown in Growth rates:- the GDP rate of India has gone below 5% forcing Foreign investors to pull out money from Indian markets.

4.Changing Trend:-  trading in the other currency markets like:- Indonesia, South Africa is putting further pressure on the rupee.

5.Unemployment:- People are not getting work and are turning as a liability for government putting pressure on government.

6.Lack of Self-Employment:- India experiences a very less percentage of self employment resulting in unemployment.

7.Less forex reserves: India's exchange reserves are just to cover imports of  seven months. The forex reserves have declined very quickly and is a issue of concern
 
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