It has been only months India got symbol for our centuries old currency ‘The Rupee”. Now Indian Rupee is passing through tough weather. It is depreciating day after day. There is a contradiction in this phenomenon, which is, US and Euro zone countries except Germany are facing deep financial problems. They say India, being an emerging economy, is safe. But are we really safe? If we ask this question in the light of rupee depreciation the answer is a gloomy no. Because depreciating rupee is hazardous to the economy.
What are the reasons for rupee depreciation? One obvious reason is dollar, the self proclaimed global currency, is gaining strength. The foreign institutional investors (FIIs) now began to like dollar than rupee. They keep on selling rupee and buying the US currency. So demand produces price and dollar becomes stronger. Another reason for the weakening rupee is our skyrocketing inflation rates. Besides all the efforts of the reserve bank there is no cool off for the rates.

What will be the future?
There are apprehensions that RBI will intervene now to rescue the rupee. Bet there are no signs yet. If you have relatives who are sending remittance in dollar medium you have a reason to cheer now. But if you want to send money from India in dollar denominations, for at least some time, you are in trouble. When dollar gains strength other currencies are going to be weaker. This will definitely make an impact on India since we have the world’s largest expatriate population.