2. Introduction
After second world war, America was one of the country which had good
economic conditions during that time America had gold stock of 25 billion dollar
therefore dollar was considered as global currency.
The basic monetary unit of India. In 1991 we opened our economic system for
foreign companies and made fixed exchange rate on the basis of demand and
supply of dollar.
3. This is the reason for fluctuation in the value
of rupee and now a days the dollar
appreciates and rupee depreciates.
4. Factors
Volatility in the equity market
Responsible
The equity markets in India have
been volatile for a certain period of
time.
As per a report in Business Today,
the international investors in India
have withdrawn to the tune of INR
44,162 crore during June 2013 and
this is a record amount.
5.
Withdrawal of investors
Investors in Indian market were fail
to sustain and withdrawal there
interest to go back from market.
Recently Arcelor Metal and
Pasco decided to pull out
from projects in India.
6. Condition of import bill
India’s import bill has
been going up and
most of this can be
attributed to gold.
Oil importing
instantly
increasing
7.
Poor
One of the main reasons behind the Indian
government’s inability to arrest the fall of
the national currency is the critical current
account deficit. In 2012-13 fiscal India’s CAD
was measured at 4.8 % of GDP.
8. Increasing
burden of subsidy on
government
food security bill which increases
financial burden on government.
9. Impact of Rupee depreciation on key
sectors
Sector
Proportion of M-
Impact
cap of Nifty
Auto
12.1 %
Marginally positive
Capital goods
6.4
Negative
FMCG
18.1
Neutral
Cement
3.3
Negative
IT
20.4
Positive
Metals
2.6
Positive
Oil and Gas
18.5
Positive
Telecom
3.2
Marginally
Positive
Coal
1.4
Marginally
Positive
10. Government Policies to stabilize
Rupee depreciation
• Import of gold banned.
• Capitalise public bank sector bank.