Finshots Profile picture
Aug 23, 2019 6 tweets 2 min read Read on X
So the Rupee is falling and we thought it would be a nice idea if we could post a short thread simplifying a few reasons why our currency is slipping
#RupeeVsDollar #Rupee
1. US-China trade war. Long story short, when two global giants slug it out & bleed themselves dry, it leaves a gaping hole in the global economic fabric. Slow growth globally means slow growth in India because India is also a part of this fabric.
2. Also, there's all this talk about a slowdown & stuff. So investors aren't really stoked about investing in India. Which means that the Indian rupee is no longer in demand because you need the Rupee to invest here. And when something isn't in demand, its value deteriorates
3. Also, many investors who believed the government would usher in a new era of economic prosperity have been left bitterly disappointed with the budget which increased taxes on Foreign Portfolio Investors ( read as people overseas who invest in Indian markets)
4. These foreign investors are in turn pulling out their money and are moving it to relatively safer places, like US Government bonds. And in the process, they exchange the rupees that they owned, for the dollars needed to buy US bonds.
5. This creates more demand for the dollar pushing its value up, while the Rupee depreciates because nobody wants it anymore. Also if you can think of other reasons why the rupee is on the slide. Please add them on this thread. Will help out other people. Cheers

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