Rupee fell sharply against US Dollar reaching to a 13 month low of 63.89….
Why rupee is sliding?
US Dollar Rally : Ongoing sharp US Dollar rally is affecting the markets around the world and India is no exception. Although the macro economic aspects have improved, the Rupee is still largely affected by surging US Dollar. This trend is likely to continue and Rupee is expected to tumble further…
Surge in Gold imports – India imported 146 tonnes of gold in November 2014 amounting to $5.61 billion, in comparison to $835.83 million in November 2013.
Gold imports are expected to increase further due to the easing of import restrictions by Indian government.
Widening Trade Deficit Gap – On hopes of growth and positive economic environment, imports of machinery, transport equipment technology, commodities like Gold and Silver rose sharply leading to the widening of the trade deficit of 16.80 Billion US Dollars, highest since May 2013.
Other Macro Economic Reasons : Sliding oil prices, surging dollar, weak Asian currency and The Rubble Trouble are some of the macro economic factors which will have a sustained impact on rupee value in the near future…
While the efforts of a strong central bank, improving domestic economy, political stability with a full mandate, falling inflation, low global crude oil and commodity prices, and a comfortable fiscal situation are major positives, a weak Asian outlook and weak foreign investor confidence are potential threats to Rupee value….
As an NRI a falling rupee value is certainly good in the short run, because we get more rupees for the same amount of Dirhams, in the long run it may have a negative impact on our finances…
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