1.
WHY INR IS DEPRECIATING
AGAINST USD ?

2.
Table Of
Content
01 Introduction
02 History of INR and USD
03 Reasons why INR depreciating against USD
04 Pros and Cons
05 Conclusion

3.
INTRODUCTION
BUY
SELL
Exchanging currencies between nations at market
rates is referred to as foreign exchange. Currency
exchange is the process of converting one nation's
currency into another.
What is Foreign Exchange ?
A currency's value declines
when compared to other
currencies, which is known
as currency depreciation.
Depreciation
An increase in the value of
one currency in comparison
to another is known as
currency appreciation.
Appreciation

4.
History of Indian Rupee
Birth
1947 1966 1970 2000 2013 2016
Economic
Crisis
Post Bretton
Woods
Revaluation
Depreciation
Demonetization

5.
Indian Rupee to U.S Dollar

6.
Global economic
slowdown
Crude oil prices India’s trade deficit FIIs and DIIs
The decision by the
Organisation of Arab
Petroleum Exporting
Countries also known as
OAPEC to reduce production
and the decision taken by
Persian Gulf nations to
double the price of crude oil
led India to borrow foreign
currency. India had to borrow
foreign currency that lead to
another reason why is the
rupee falling. In spite of being
one of the strongest financial
countries in the world, India
falls in short of effective plans
that will show a difference in
the country’s economic
status.
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Contents Title
The global economic
slowdown is one major
factor contributing to both
the stock markets and the
Indian currency fall. The
Indian rupee falling due to
the slowdown and has
been unable to regain its
value. Hence the
conversion from USD to
INR always makes for a
loss.The rupee value
against US dollar has
always been a
disappointment due to the
global economic
slowdown, causing abrupt
losses to some of the
business men
Indian exports contracted
for the 13th month in a
row in December 2015 as
outward shipments shrank
14.75% to $22.2 billion
amidst a global demand
slowdown. Imports too
plunged 3.88% to $33.9
billion. The trade deficit
during the month widened
to $11.6 billion as against
$9.17 billion in the
previous year. This heavy
trade deficit weakens the
Indian rupee in the Forex
online market.
The decision by the
Organisation of Arab
Petroleum Exporting
Countries also known as
OAPEC to reduce
production and the
decision taken by Persian
Gulf nations to double the
price of crude oil led India
to borrow foreign currency.
India had to borrow foreign
currency that lead to
another reason why is the
rupee falling. In spite of
being one of the strongest
financial countries in the
world, India falls in short of
effective plans that will
show a difference in the
country’s economic status.
Foreign institutional
investors (FIIs) have been
in the sell-off mode in the
equity segment for the past
three months and sold up
to Rs. 7,146 crore. On the
other hand, the Domestic
institutional investors (DIIs)
net buying stood at Rs.
9,249 crore during the
same period. Since the
buying being more than
the selling, the Indian
rupee depreciates. If this
streak of sale continues for
the next few years, the
value of rupee vs USD will
be falling beyond
measures.
Reasons

7.
Reasons
The way the Indian economy works is very different from the U.S. economy. The gross fiscal deficit spiked from 9.0% of GDP
in 1980-81 to 10.4% in 1985-86 which went on to increase up to 12.7% in 1990-91. These deficits faced by the GDP were
balanced by burrowing foreign currency that led to drying of the foreign exchange reserves. Another event that led to a drop in
the value of the rupee falling.
The difference in interest rates
The exchange rate largely depends on the inflation rate of the country. The Indian economy overall is in a state of turmoil and
the inflation rate doesn’t seem to come down or stabilize thus leading to a poor exchange rate between USD and INR.The
constant turmoil in the fall of the value of rupee against the US dollar, creates multiple issues in the economy of the country,
making it a thing to worry about.
Persistent Inflation
The rising current account deficit, possibly due to the severe problems faced by the Euro Zone, is a notable reason why
the Indian rupee is depreciating. The Euro Zone has been historically one of India’s major trading partners. The rising
current account deficit has depleted our foreign exchange reserve and thus led to a fall in the value of the Indian Rupee.
Current account deficit

8.
Pros & Cons
❖Depreciation strengthens inflationary forces
❖A depreciation of the domestic currency results in higher
import costs for the country
❖Foreign Travel and Overseas Education becomes costlier
❖The interest burden would increase on foreign currency
denominated debt.
❖A large and rapid devaluation may scare off international
investors.
❖Sectors who export most of their products would
gain from depreciating rupee
❖Prices of product made in India would be
competitive with exported products
❖Improves the Trade balance
❖Travel to India gets cheaper & local industry may
benefit.
PROS CONS

9.
Conclusion
Introduction History Reasons Pros and Con
All about what is
Foreign Exchange,
Depreciation and
Appreciation
How prices of INR
fluctuated over the
years
7 main reasons why
INR is depreciating
What are the
benefits and
disadvantages of
depreciating