Inr Currency Trend

INR/USD Figure 1 INR/USD Exchange Rate Changes from January 2006 - September 2010 In reference to Figure 1, the substitution rate curve to near extent reflects that the transform rate of rupee against the US long horse had been appreciating until Jan 2008 and then gradually depreciating in its value. Rupee experient a rapid rise in value during certify to may 2007 by almost 8%, and another metre of relatively mild appreciation between August and October 2007. It apprehended to a 10-year high of INR$39.27 per US dollar in January 2008. thither argon several determinants driving the appreciation and depreciation of convince rate. Examples entangle inflation rates, interest rate differences, supply of abroad exchange and the demand of the world for that contrasted exchange, central assert intervention, as nearly as demand for and supply of domestic help bullion with the rest of the world (Mallick 2010). The Reserve Bank of India (RBI) was actively step in in th e Forex securities industry to prevent the rupee from modify against the US dollars.

Since withdrawal in early 2007 due to concerns over lift inflation, there had been a high influx of international exchange inflows taken in a variety of forms such(prenominal) as foreign direct investment (FDI), remittances sent adventure home by Indian expatriates, and external commercial borrowings (ECB) (The economic expert 2007). With Indias strong economic growth and stock market performance, it created a large domestic market that offers promising opportunities for topical anesthetic and foreign companies, which emerged as an att ractive investment destination and boosted t! he assent in foreign investors. During April to July 2007, a recorded net yearbook inflow of funds by foreign institutional investors (FII) amounting to US$20.7 billion, to arrive ather with a FDI inflow of US$6.6 billion as compared to US$3.7 billion in April-July 2006 (Department of Commerce 2008). Inflows through ECB had amounted to US$12.1 billion during April to December 2006 through borrowings by Indian...If you want to raise a full essay, order it on our website: OrderCustomPaper.com

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