Anoop George

Anju A Nair
Amal Biju
Anu 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 SCENARIO
Depreciation 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%.
CAUSES
1. 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 NEGATIVE
IMPACT IMPACT
 POSITIVE IMPACT
Reducing 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.
 NEGATIVE IMPACT
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.
REMEDIES
REMEDIES

SHORT TERM 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 REMEDIES
Attracting 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.
CONCLUSION
The 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.