How can we increase our Indian Currency ??
Answers
Explanation:
To increase the rupee value or Indian currency value, Indian government needs to adopt the following measures:
-Increase our export trades by producing higher quantities of Indian goods that are in demand abroad.
We also need to start manufacturing or producing new stuff that is in demand abroad.
-Indian citizens should themselves feel responsible and try to purchase only Indian goods. Wherever possible, we should avoid buying stuff from abroad.
-We should encourage more FIIs to invest in Indian Stock Market.
-We should improve inflow of foreign currency in India by improving the tourist spots and maintaining them properly to attract foreign tourists. We should promote Indian tourism on a global level as much as possible. We can make use of the Indians who are settled in different countries of the world. India has some of the most beautiful places in the world and it is important to maintain their sanctity.
-We should bring back all the black money of corrupt politicians and businessmen from Swiss bank accounts. This money should be utilized for the betterment of our own people as well as for innovation.
Thanks & Best Regards,
Bhaktee
#9676122 Nov 2012 08:40
GANESH G BHAT
Points:
3
(₹ 2)
Currency rate of any country depends basically on demand and supply. Speculation, investments or economic activity also contribute to it.
A country's currency does not always reflect its economic condition. Though a country with very strong economy have a weak currency relative to other currencies and vice versa. Currency trade mostly on technical factors than its fundamentals. If a currency's value become too weak or too strong compared to economic conditions, as a result of free market trading, the government tries to artificially normalize the demand and supply.
Raising Interest rates in case of weakening currency. This may work out or not because high interest rate weakens the economy which may further weaken the currency.
A strengthening currency can be normalized by flooding the market with more currency. This is done by decreasing interest rates. This leads to inflation which makes a fall in currency value. Currency value depends on multiple factors.
Factors affecting currency movement:
1. Import of goods and services require conversion of local currency in to foreign currency where the goods and services are imported for payment.
2. Government actions.
3. Speculation in the foreign exchange market which includes the inflation rate, economic activity or the currency's trading activity.
#9679323 Nov 2012 07:36
Tulika Devi Nath
Points:
10
(₹ 9)
First of all you should understand that the value of currency going down (against other currencies) doesn't always reflect a weak economy. Similarly, an always appreciating currency doesn't indicate a healthy economy. Both has their own advantages and disadvantages. The factor which is bad for a country's currency is huge fluctuation of its value in the international markets. Fluctuations reflect instability of the economy and other countries lose confidence in an ever fluctuating economy.
There are many factors which are responsible for the value of the currency. Among them the key factors are inflow of foreign investments (demand for domestic currency), balance of trade (net of imports and exports), foreign remittances (inflow of foreign currency), inflation, gross domestic product, monetary policy, global events etc.
Currency is a commodity. The basic principle which determines price of a commodity is demand and supply. Similarly, the value of a nation's currency is determined by the demand and supply of that particular currency in the international market. Thus the only mean of increasing the value of the currency is to generate more demand for that currency.
The central bank of each country closely monitor the value of the currency in the international market and intervenes as and when required to arrest any significant slide or steep appreciation. The advantages of an appreciating currency are as follows:
Imports getting cheaper: Due o higher demand of the currency in the international markets, the exports will get dearer while imports will become cheaper. In case of a country is highly dependent on imports, it will help them in building raw material reserves.
consultancy services exports.
to reduce most of the present imports burden.
2. Permit Foreign direct investments judiciously to improve capital inflows.
3. Improvement in Indian Entrepreneurship.
4. Allow healthy competition in trade.
5. Safe guard GDP growth
6. Value addition to our own raw materials.
7. Attaining self sufficiency in food production.
8. Improve R&D investments
9. Transparent pro-active & supportive Government policies.
Answer:
It can be thru larger exports, thru decreasing imports, increasing the rates of interest in the economy which will attract foreign funds into our treasuries, corporate bonds, FCNR deposits etc, open up domestic economy its various sectors to foreign capital FDI, make stock markets more attractive to FIIs..