How demand jumps from rupee to American dollar?

Currency

In the recent years the overall production in all the three sectors of the Indian economy – primary, secondary and tertiary has recorded very poor growth and consequently the production in them has substantially gone down.  Investors from the foreign countries do not find India, a country of lucrative businesses. Decrease in the export, brought about by a fall in the production in agriculture, manufacturing and mining, leads to decrease in the earning of dollars. This finally ends up increasing the demand for dollars and raising its value against the Indian currency. In the critical condition of the consistent fall in the value of rupees against the dollar’s investors prefer to deposit their money in the safe havens of US treasuries, Swiss franc, gold and so on to avoid losses to their investments. This alarming situation of shifting of investment from India to other destinations leads to redeeming of their investments from the country, and consequently the demand for the dollar goes up which brings down the values of rupee.

  • The Indian rupee depreciated this week by 07 paisa gain compared with the previous week close.
  • Last week Indian rupee closed at ₹69.15 with the aggregate loss of 20 paisa.
  • This week on Friday rupee closed at ₹69.22 with the loss of 06 paisa on Friday compared to US dollar.
  • Highest gain 41 paisa on Tuesday and highest fall 41 paisa on Thursday.

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