TOPIC: Why rupee depreciates against USD

When India is growing lot faster and lot better then US then why Indian rupee is depreciating. Is that good or bad for United States of America. Probably growth needs depreciating domestic Currency? Any ideas?

Currency will go up and down depending on

1) Inflation - higher the inflation, lower the value of currency
2) Foreign Investments - More investments - higher the value of currency.

USD appreciates mostly because foreign investments in USA.

In times of global crisis, USD is still the safest bet and hence although US economy might not be doing well but rest of the world is also not doing better either.

Also, compared to other emerging markets like Brazil, INR has not dropped by that much % points. Currency fluctuation is dependent more on a global economics rather than local.

As the PP (prev poster) said, it's also demand/supply, inflation & Foreign Investments.

ggoli wrote: When India is growing lot faster and lot better then US then why Indian rupee is depreciating. Is that good or bad for United States of America. Probably growth needs depreciating domestic Currency? Any ideas?

Goli,
Nice to see that you have started a different topic other than the videos.
Good job and good luck with your creative contribution.

I have few topics like 'spirituality' and 'self'. Will start in 2012 if AT encourages by active participation of members.

The main topics are (Laws of Nature/God)

1) Fault is of the sufferer.

2) What ever happens is justice

3) Worry is the symptom of Greatest ego. That assumes I can do things alone.

Eurozone debt crisis has caused European investors to repatriate their funds which has caused more outflow of funds from India. RBI does not have sufficient $$ to buy those Rupees. India just got $15 billion swap line from Japan in last couple of days.

online.wsj.com/article/BT-CO-20111228-705680.html

SuvasShah wrote: Eurozone debt crisis has caused European investors to repatriate their funds which has caused more outflow of funds from India. RBI does not have sufficient $$ to buy those Rupees. India just got $15 billion swap line from Japan in last couple of days.

online.wsj.com/article/BT-CO-20111228-705680.html

Suvas,
Welcome to AT family and AT forums.

Currency is a commodity subject to demand - supply, risk, etc. But, importantly, it's manipulated. With that piece of arcane wisdom, maybe I will wait for ggogli to post on spiritual topics.

Infants also manipulate to get attention from parents. We have no choice we are part of the manipulation.

To do manipulation, numbers should cooperate. Otherwise that manipulate traders/institution will go bankrupt. Inflation is one of the big factors together with projected growth of Indian Economy when compared with US or other Countries.