Enter your question hereIn 2007-08, the Indian rupee appreciated to around Rs.39 against the US dollar, and again plummeted to around Rs.50 by October 2009. What is the impact of the fluctuation in the rupee-dollar exchange rate on Indian industry? Give your answer with special emphasis on the export sector and IT/ITES companies. What can companies do to protect their interests in this volatile exchange rate environment? Also, explain the impact of the rupee-dollar exchange rate on inflation, economic growth, and competitiveness of Indian industry.
The rupee had crossed 51 in March 2009 and in October it was below 47 against the UD dollar. Actually whenever the rupee depreciates against the dollar its bonanza for the Exporters and the IT companies but as a nation we are at a loss because our import bills(oil, defence equipments and now nuclear reactors and fuel) keep on rising. All our forex reserves in terms of US dollars will become waste paper if the US which is already jelous of our growing economy decides to treat us like Iraq.
If the rupee depreciates against the dollar then there is inflation because of increase in money in the economy, also exporters gain but the domestic consumers suffer a lot because there is a big price rise.