Over the past few years, the value of Indian rupee has been plummeting fast against the US dollar. And the falling value of a rupee means less export/import power in the hands of people as well as the government. Which in turn makes the nation financially weaker, hampering the prospects of international trade and currency exchange rates.
Here are a few factors that change the dynamics of the Indian economy.
Crude oil: With the fast development and growth of the Indian economy, the demand for petrol and petroleum products has been consistently rising. India produces about 20% crude oil we require, and the rest is imported from Saudi Arabia, Iran, and other Gulf countries. Reputed oil companies of India require millions of dollars every day in order to import crude oil and gas. Thus, the increase in the demand for the dollar leads to its appreciation and decrease in the value of the Indian rupees.
Trade Tensions: The policies of the US President have had an impact on the dollar as well as the International Money Exchange forums. The administration’s decision to impose import tariffs against China, Mexico, Canada, Europe, and Turkey is expected to stoke US inflation, which would ultimately lead to the strengthening of the Dollar. A strong dollar makes imports more expensive, and the escalating US-China trade war is already rocking the forex market.
Indian economy: The failing graph of the Indian economy has also contributed to dwindling foreign investments.
If you want to know other factors for Why Indian Currency is Falling?, visit source blog.