Friday, August 23, 2013

Why the Indian Rupee is Falling Against the US Dollar?

Indian currency rupee is depreciating quickly against the US dollar recently. It has lost 14% of its purchasing power against US dollar since the beginning of May, 2013. It is one of the worst performing currency in Asia. It hit its lowest level of 65.56 rupee/dollar last week. All the efforts of the Indian central bank RBI is failing in stemming the fall of rupee in the Forex market. Why the rupee is depreciation against US dollar and other currencies like Euro and British pound? What is the root cause of this devaluation? I analyze these questions in my economic report below. In nutshell, Indian government and RBI's loose monetary policy is to blame for this fall in rupee's value.


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