Why rupee is falling against the Dollar?
For the past 1 year, Rupee has been fluctuating and fallen heavily against the US Dollar. The rupee is currently trading at Rs 61 / Dollar. Several predictors still feel that this fall may not end now. Downtrend may continue for some more time. As an investor do not think that you would not get impacted with such fall. Also there are a few best investment options which you can en cash with such fall in Rupee
There are several reasons for as to why rupee is falling against Dollar. Rupee hits 11 month low in the last 1 year against US Dollar. Below are the major incidents in the last one year which has impacted for such fall.
- Foreign Institutional Investors (FII’s) took away $ 90 Mn from stock markets.
- RBI Poor inflation outlook
- GDP has fallen to 10 years low in the year ended Mar-2013. Poor performance of farming, manufacturing, mining sectors has led this low growth. GDP has slowed down to 4.8% for the period Jan-2013 to Mar-2013.
- As per forex dealers, dollar demand related to defense payments and month end imports also impacted such fall in rupee value.
Who would get benefitted when rupee is depreciating?
Invest in companies which are exporting: Companies which export are going to benefit with such fall in rupee. Means, companies like Information Technology (IT) or Textile companies which get majority of their revenues through exports are going to benefit. E.g. IT Company like TCS would get benefited as the majority of the revenues are coming through its exports. While it would continue to do same business value, the dollars which are received would get converted into Indian banks at a high rate of @ 61 per dollar instead of Rs 52 per dollar which was there few months back. So you should invest in best IT companies and good Textile companies to gain in such scenario.
NRI’s would get benefited: NRI would get benefited from such fall in rupee value against dollar. NRI’s who are earning in dollars can get more rupees in India and they can further invest in Indian markets or Bank FD or any other saving options.
See below to have feeling what happened to rupee in last 5 years against major currencies.
So….What will be future…..Govt have to act…asap………..