rupee fall ppt

8/13/2019 Rupee Fall Ppt

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RUPEE FALL


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MONEY ?

Money is the value assigned to a commodity, a

piece of paper, a coin or electronic data (think

online banking and credit cards).

It can be of different types-commodity money,

representative money, fiat money and

commercial bank money


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Commodity Money

. Gold coins, cocoa beans, cattle or anything

that has a value of its own and is used as a

medium of exchange is commodity money.

The use of commodity money is similar to

barter, except that the commodity used is

widely accepted and can be easily handled


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Representative money

Representative money is token coins and

notes that can be exchanged for a fixed

amount of precious metals or other

commodities.


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Fiat Money

fiat money's value is imposed by the

government,

which makes refusal of payments made in the

notified legal tender, in the form of currency

notes and coins, illegal.


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COMMERCIAL MONEY

Instruments such as cheques, demand drafts

and banker's drafts are commercial bank

money


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VALUE OF CURRENCY "The value of a currency depends on factors that affect the economy such

as imports and exports,

inflation,

employment,

interest rates,

growth rate,

trade deficit,

performance of equity markets,

foreign exchange reserves,

macroeconomic policies,

foreign investment inflows, banking capital,

commodity pricesand

geopolitical conditions,"
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REASONS FOR FALL IN RUPEE.


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Worsening current account deficit


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Insufficient FDI inflows


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Rising Import bill

Rising import bill (arising out of gold) is also amajor factor that has curtailed governmentseffort to tackle the fall of rupee.

Gold contributes to over 10 percent of the totalimport bill. Gold imports were 141 tonnes in Apriland rose to 162 tonnes in May.

Due to certain government measures goldimports declined significantly in June but could

not be held for the month of July.


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Overall economic contraction

Poor economic growth in the manufacturing, agriculturaland mining sector has dented investor sentiment and theyhave become wary of investing in India.

Reflecting a persistent slowdown, industrial production inMay contracted by 1.6 percent, lowest in the past 11months.

Last week RBI cut its growth forecast to 5.5 percent for thefiscal year, from 5.7 percent.

Unless a better sentiment prevails, confidence in the rupee

will stay shattered.


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Strengthening of dollar overseas

In the last six months US dollar indexstrengthened by 3.52 percent.

The strengthening of dollar is beyondgovernments control which is ultimatelyhammering the Indian currency.

Gradual recovery in US economy coupled withrising expectations that Federal Reserve willwithdraw its stimulus package soon is

underpinning the US dollar index.


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IMPACT OF RUPEE FALL

The rupee, which reached 68 vs US dollar on

Wednesday, hasn't been this bad in over 18

years. It is going to affect the common man in

many ways like expensive foreign travel,costlier imported goods and higher EMIs.
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GROCERY BILL

High inflation has been pinching you for more

than a year now. Now, the weakening

rupeehas made crude oil, fertilisers,

medicines and iron ore, which India imports inlarge quantities, costlier. Though these items

are not for your daily consumption, they

impact your finances indirectly
http://businesstoday.intoday.in/story/ficc-capital-md-ajay-mahajan-on-rupee-fall/1/21363.htmlhttp://businesstoday.intoday.in/story/ficc-capital-md-ajay-mahajan-on-rupee-fall/1/21363.htmlhttp://businesstoday.intoday.in/story/ficc-capital-md-ajay-mahajan-on-rupee-fall/1/21363.htmlhttp://businesstoday.intoday.in/story/ficc-capital-md-ajay-mahajan-on-rupee-fall/1/21363.html


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Influence petrol and diesel prices

FUEL being directly connected with the cost of

transportation, prices of goods that are

transported from one part of the country to

another, such as food, are bound to rise. Thiswill have a direct impact on the household

budget," s


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FMCG, or fast moving consumer

goods

such as soaps, detergents, deodorants and

shampoos, of which crude oil is an input, are

likely to become more expensive.
http://businesstoday.intoday.in/story/fmcg-firms-to-hike-prices-on-packing-norms/1/20977.htmlhttp://businesstoday.intoday.in/story/fmcg-firms-to-hike-prices-on-packing-norms/1/20977.htmlhttp://businesstoday.intoday.in/story/fmcg-firms-to-hike-prices-on-packing-norms/1/20977.htmlhttp://businesstoday.intoday.in/story/fmcg-firms-to-hike-prices-on-packing-norms/1/20977.html


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FOREIGN EDUCATION

With the rupee weakening, the burden has increased

Students who have taken loans to fund their foreign

degree are also bearing the brunt. Education loans areusually in rupees, but as students pay their expenses ina foreign currency, the cost of education and stay hasincreased. For $100,000, a student had to pay Rs 45lakh. Now, he has to shell out Rs 52-54 lakh, depending

upon the exchange rate.


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JOBS AND REMUNERATION

Not only is the rupee falling, for some, the pay

cheque may shrink as well. Every industry

which is dependent on imports will have to

face an increase in cost of production andoperations


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VACATIONS

The falling rupee is bad news for itinerant

Indians and vacationers to a foreign country.

"Air fares are going up due to an increase in

fuel surcharge.

The stay will be costlier by at least 3-5%. Also,

shopping can become expensive by 5%.

Eating out will also be costlier by the same

percentage


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BUYING A CAR

The depreciation of rupee has impacted theautomobile sector in three ways.

First, input costs have risen as these

companies use imported components. Second, some companies will have to pay

higher royalty to foreign parent firms.

Third, many have foreign currency loans in theform of external commercial borrowings andforeign currency convertible bonds


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ENTERTAINMENT

The imported paperback, your favourite pizza

and

the latest laptop will also become more

expensive.

"There is an increase in the cost of imported

books as well as the cost of sourcing them.


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Electronic consumer goods

Electronic consumer goods such as computers,

televisions, mobile phones, etc, with imported

components will also become costlier.

International food chains which run outlets inIndia are not denying the impact on

profitability.


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CONCLUSION

The depreciating rupee has had a significant

impact on our capital expenditure as we

import a lot of special kitchen equipment.

There has been an indirect impact too as asmall part of inputs are imported by our

suppliers. If the trend continues, we will be

forced to pass on some burden to customers,

rupee fall ppt

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