The Indian Rupee

By- Shashank Kumar

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Economy is also known as the "Backbone of a Nation". Economy decides the potential of a nation. The better an Economy the better is it's National potential. It's been a long walk for the Indian Rupee since 1947. The demonetization back in November 2016 by the present Govt was not as fruitful as expected. The Indian Rupee at the global level was affected by this far more than anybody could have ever hoped. It's value has become more like a sinusoidal wave, increases in an instant and decreases in the other. Among all, one question still remain common to all the minds, "What is the future of Indian Rupee and how stable is the currency ?".

The Indian Rupee vs US Dollar that was valued 7.50 in year 1966 is about 74 in 2019. This is a huge downfall for any currency. The rate of depreciation is very alarming not only for the Govt but also the citizens of India. There are numerous reasons behind the downfall of Indian Rupee. One of the main reason is the "OIL IMPORT". India imports about 80% of the total oil from foreign nations. The oil hike has lead to outflow of  Dollars which in turn has brought down the Foreign Deposit (since Dollar outflow is more than inflow) because of Dollar being a globally accepted currency.

 US and China are under "Trade War" at the moment. This has lead to low FDI which has resulted in the making of Indian rupee today. Now many of you may wonder something like "Those two are fighting, right ? So, why the hell are we bothered by this". Those two nations share a similar attitude of  "stand above all". As the two superpower fight for trade, trade tariffs will increase. High tariffs means low income and low amount spend on other goods. When any other nation  sell their goods in such situation, people will be less inclined to buy. This in turn will decrease the Foreign Deposit thus increasing the value of foreign currency and decreasing ours. Even though US-China conflict does not affect India directly, it does lead to a global slowdown.  This is one of the reasons for depreciation.

At present the Indian Currency is one of  the most unstable currency. The current scenario is such that no one, not even the best economist can predict the future of Indian Rupee. All we can do is hope for the best.