Why 1$ = 76.5 Rupees Approx – All You Need to Know: Over the last few years, rupee’s prices have been hitting all-time low and the Indian economy has slowed down. One of the important reasons for falling is the value of Indian rupee. In 1947 1INR was $1 and today $1 is equal to 76.5 INR. The dollar-rupee relation is defined by the perfect market exchange between the two countries. It is determined primarily by major factors Interest rate in 2 countries, like a rate of inflation and capital market equilibrium. If the rate of interest rate is higher, the currency weakens; the foreign exchange rate between the two countries is directly related to an interest rate.
If the inflation in the country goes up it directly affects the country’s GDP growth and currency value in an international market. Like this, there are so many factors which result in Why 1$ = 76.5 Rupees Approximately, so keep reading the article and by the end of it, you will definitely know the aspects which lead to the downfall of rupee currency. Like our article, Read this How to Prepare for an Interview
India is a major exporter of many agricultural products like spices, rice, grains and much more. But India disadvantages its imports more than the export rate which results in a trade deficit. India import many electronic items from a technologically advanced country like China, Japan, USA. This trade deficit has widened $15.5 billion as of August 2017 which is higher than $10.3 billion witches the country imported in July. The imbalance between import and export of goods and services in a country called the trade deficit. As of September, India’s trade deficit widened to $ 11.64 billion, the exports were $23.82 billion while the goods imports were $36.45 billion which is a 21 percent difference between trades. This imbalance in trade results in the falling of rupee in a world market and subsequently the rupee price falls against the dollar.
Current Account deficit:
If we break down the current account deficit, it is defined as the country’s trade where the value of goods and services import exceeds the value of goods and services of export. India being a developing country usually import goods from other nations. A higher current account deficit weakens the country’s currency rate. According to Hindustan Times, India’s imported $ 356.7 billion worth of goods and services around the world up by 33.9% from comparison to the previous year. If we go by this rate the currency rate will go down as the major imbalance occurs.
It’s no secret that the crude oil markets have seen an all-time low rate in history. As many countries are heading towards solar energy utilization, crude oil prices continue to fall down. For the record, the USA is the highest importer of crude oil, so when the crude oil prices go down then the USA can save millions of dollars to buy it. Which will benefit the dollar currency as a results Indian currency falls down in the forex market because India buys crude oil in dollar currency.
New policies of Government:
After the demonetization of old notes and roll out of new tax system GST (goods and services taxes) Asia’s third-largest economy has slowed down since 5 quarters which has inevitably fallen the currency price against the international market. As of now the Indian rupee is has hit a 6 month low of 76.50 rupees against the US dollar. The main reason is the foreign investors pulling out their investment ventures in India to invest in their own country. The government must make new policies to attract investors to invest in India if it wants to strengthen its currency.
A rate of Inflation:
The purchasing power of the USA is more than India due to low inflation. Inflation is described as “Lower the rate of inflation higher the exchange rate of a nation,” Inflation is subjected to demand and supply of goods. As the developed nations have their own resources they do not import a huge amount of goods. But for developing nations like India, which as still growing we prefer imported goods from other countries as they are modern and cheaper in nature. So when we import goods, we also import inflation, we give the export bill, we reduce our GDP, reduce per -capita which indirectly affects the currency strength of our country.
Even though we are miles away to match the dollar value, to strengthen the dollar we must encourage government policies which contain import savings, FDD (foreign direct investment), reducing inflation rate and as a citizen, we can buy the home-produced goods like electronics, daily items which will directly contribute to the GDP and Currency value. So we hope you got the answer for Why 1$ = 76.5 Rupees Approximately. You may also like How to open a saving bank account in any Bank of India
As of now, the whole world is facing challenges due to COVID 19 Pandemic, India is one of the countries that are facing this epidemic. Let us see how the US and India and the whole world will revive the economy soon. Share the article with your friends and give your suggestions in the comments down below. We will be coming back with the next article on how to revive our economy, in that we may provide some suggestions to people of our country how we can help to make a strong Indian Economy. Stay tuned with us for more informative articles.