Why rs is depreciating

A country that is going through a recession is likely to have a falling interest rate, reducing its chances of attracting foreign capital. Its currency will weaken as compared to countries with stronger economic performance. Foreign investors tend to move their money to countries with better economic performance.

If investors expect the currency of a country to appreciate, they buy more of it to make quick profits. The expectations of speculators can make the currency appreciate.

The higher demand for the currency makes its value go up. Negative expectations can also cause a fall in its value. It is related to the balance of payments and current account. If export prices increase at a higher rate than import prices, the terms of trade of the country improve. The Indian Rupee can depreciate against the US dollar due to a combination of local and global factors, and this trend may continue as India is a developing nation.

The exchange rate can have a profound impact on the economy. The RBI targets a particular exchange rate, and it may choose to actively intervene in the market by buying or selling US dollars.

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ET India Inc. ET Engage. ET Secure IT. Depreciation bias on horizon; rupee likely to test Rupee strengthens 0. Gilts suffer on high oil prices but rupee steady So far this month, the rupee has depreciated around 1. Will RBI intervene to arrest overvalued Rupee's slide? Rupee consolidates; gilts pin hopes on RBI announcing OMO So far in the month, the rupee has shed close to a per cent against the US dollar because of the worries on the import bill sparked by hardening oil prices and as global central banks are increasingly talking of tightening monetary policies.

According to Farrukh Saleem, dollars used to come to Pakistan through Pakistan's trade with Afghanistan. He said that before the Taliban took over, five to seven million dollars used to come to Pakistan daily but now five to seven million dollars are going to Afghanistan daily from Pakistan and on the other hand Pakistan's imports have also increased due to which the situation is worse. Is done.

Farrukh Saleem says that SBP has added 23 1. Farrukh Saleem says there is currently no magic wand to improve the situation in Afghanistan and increase exports.

If the SBP raises interest rates to support the value of the currency, it will affect economic growth targets. However, the government will have to work to increase its exports. Malik Bostan of the Forex Dealers Association also blames the current situation in Afghanistan for the dollar's rise against the rupee. Malik Bostan says Afghanistan is completely dependent on Pakistan. In one month, Pakistan's bill has increased by one billion dollars. In the past, there was a difference of a few million, but the increase of one billion dollars is amazing.

In such a situation, the difference of one hundred million dollars a day is making the situation worse. Regarding the smuggling of dollars, he said that at that time the dollar was not being smuggled but in the past the dollar used to come from there a lot but now it is leaving but it is not in such a large number. According to him, the government has ordered two billion dollars worth of mobile phones.