FALLING

Anoop GeorgeAnju A NairAmal BijuAnu Rose Tom Anu Mathew

ROAD MAP

1. INTRODUCTION

2.CURRENT SCENARIO

 3. CAUSES

4. IMPACT

5. REMEDIES

6. CONCLUSION

INTRODUCTION Every country exports and

imports for its survival. As long as this equation of imports vs. exports is balanced, it is good for the nation.

when imports becomes more than exports, the value of currency starts declining.

Each country has its own currency except in Europe where a group of countries has a common currency.

The rate at which one currency can be exchanged for other is called exchange rate.

This rate changes on daily basis depending upon the demand and supply of currency.

A country has to pay more rupees against the dollar in the case of depreciation

CURRENT SCENARIODepreciation in rupee has

become a big tension for the Indian Government and breaking news for the news channels these days.

Rupee has declined to its peak level in the month of July, 2013and is expected to continue in coming days.

The current exchange rate as on 5\9\13 is 68.600with a current GDP of approximately 5%.

CAUSES1.Exports falling: Worsening trade

deficit is bad news for the rupee as the demand for US dollars goes up.

2.Current account deficit could rise: India’s current account deficit is higher than expected. This occurs when import of goods and services exceed their exports.

3.Dependence on foreign flows: India would need strong foreign capital flows to finance the current account deficit.

4.Fiscal deficit: A fiscal deficit occurs when governments spend more than they earn through taxes and other sources of income

5.Growth slows: India needs a strong growth rate to sustain high spending and boost exports. However, the global outlook for exports is not positive.

IMPACT ON FALL OF RUPEE

AGAINST DOLLAR:

POSTIVE IMPACT

NEGATIVE IMPACT

POSITIVE IMPACTReducing the usage of natural

resources.Reducing the usage of

imported materials.Exporters (like those from the

IT and Pharmaceutical ) will get benefit from depreciation of Indian rupee.

Increase the demand of Indian products.

Good for companies that export things.

Operating cost will be increased there by reducing the profit margin.Increase the price of petroleum products that leads to inflation.Bad for companies that import a lot.Increase the amount of foreign loan.

NEGATIVE IMPACT

REMEDIES

SHORT TERM REMEDIES

LONG TERM REMEDIES

REMEDIES

SHORT TERM REMEDIES

Boost the slowing industrial growth.

Raising the foreign investment capital.

More exports incentives and reduce imports.

LONG TERM REMEDIESAttracting the foreign investors by bringing changes in the policy reforms.

Import of gold up to a certain extent should be provided and the import duty should be raised.

CONCLUSIONThe RBI and other Government

agencies are doing their best to tackle this situation.

India has lost a lot due to increasing corruption and lethargic government policies.

Investors have lost faith on Indian economy , American investors are gaining confidence on American economy and thus decrease in falI of Indian rupee have added to block.

THANKYOU