Are we seeing the rise of Rupee or the death of Dollar ?
Author: Ritvik Kumar, Member DelTech MUN & DebSoc Delhi Technological University (formerly DCE).
The US Dollar has become the global currency. Both the US Dollar and the Euro are popular and accepted in international markets. In 85 per cent of international trade, including crude oil, the US Dollar is involved.
As far as we talk about the Indian Rupee, it has been depreciating at 3% per year since the last 20 years w.r.t US Dollar. The main reasons for this being that our imports are greater than the exports as a result we have to buy more dollars from the banks and also, the Ukraine war has been an important factor in the Indian Rupee Inflation, as the oil exports from Russia has been disrupted.
But, as a developing nation, India’s Positioning itself as a manufacturing powerhouse, which will increase the exports in around next 10 Years. Many technology giants have setup their supply chains in India due to difficulties in navigating with Chinese Industries. India is forecasted to grow at 7% which positions itself as the fastest-growing economy in the world.
The current recession situation in the US is also going to pose some impact on the demand of Dollar in the market. During the recession the country becomes less attractive place to invest and hence may result to the collapsing of the currency. But in some cases, the opposite of this also happens like — in early 1980, the US went into recession, but during this period the value of Dollar rose. Although this is entirely a matter of time, but one or the other way the value of the rupee will definitely increase over a span of next 5 years due to the expansion of industrial sector and Indian Currency being identified in the International Market.
Hence, we cannot confidently say that weather we will see the death of dollar or not, but there are many statements and theories that suggest that their will a net rise in the evaluation of the Indian Rupee.
NOTE: The views expressed in the above mentioned article by the author are driven through the sources mentioned below. There is no intent to hurt someone’s sentiment or values.
·
economicshelp.org
· economictimes.indiatimes.com
· indiatoday.in
· Investopedia.in