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Does anyone know what could be the reason for dollar's value increasing in India day by day? Today in India, the current value of 1 dollar is Rs. 63.31 and just last month or so the rate of 1 dollar was Rs. 55 or so. There is also rumors that single dollar might go up to Rs. 70 or above in the month of September 2013. Does anyone know any possible reasons for this much of hike?
It is the RBI that looks upon the value of the Rupee with different tools that involve controlling its supply in the market and making it cheap or expensive. Right now the most stable currency in the world is the US dollars. Also, if the currency is backed up with gold then also it is not a good idea because shipping gold around the world will suck all the value of the gold.
The value of Rupees is directly linked to the amount of US dollars which is available in the Indian market. Via exports, foreign investments into India, etc; India receives dollars. So, if the dollar is low in the market then defintely it will be evaluated higher, similarly as shown in the laws of demand and supply and thus the value of the rupee depreciates.
Many people have urged that we should be using Indian commodities and buy Indian products instead of wasting Indian Rupees on foreign commodities. This way, we will build up our own Rupees in our country. Last week, the Indian Rupees was at its highest peek of Rs. 68.8 for 1 dollar, but today it has slightly declined in the evaluation.