Why Indian Rupee is Falling Against US Dollar

We have read and watched so many articles and videos on why rupee is failing against dollar. But, no one is talking about the fundamental reasons.

Today, In this article, We will discuss the fundamental reasons why rupee is failing against dollar continuously.

Most of the time, We use products which are non-Indian. But, that’s ok. It is not the biggest reason for the falling rupee.

5 Fundamental Reasons Why Rupee is Falling Against Dollar

Source: TIMES OF INDIA

1. REAL ESTATE

As we can see from the analysis, India is spending 76.9% money on investing in real estate. We have a mentality that buying a property is the best investment. But, that’s not true.

On the other side, developed countries like US, UK, CHINA and GERMANY is spending less money on real estate. Because they know multiple options for investing.

Read the detailed analysis of Indian Real Estate market.

Also read: Indian Real Estate Vs. Equity | Explained

2. GOLD

GOLD is also a big part of investment but not all the time. We have the trend to buy gold for any religious festivals or family function. The problem with gold is we never sell. That’s why it is a dead investment.

And we keep buying gold and the dead investment increases. Also, gold is giving fewer returns(ROI) than other assets.

GOLD price increases when the macro-economy is falling. Otherwise, gold is a totally dead investment.

On the other side, developed countries have no interested in buying gold. They are focusing more on financial assets.

3. FINANCIAL ASSETS

Only a few percentages of people in India believe that we should invest in the capital market. When we invest in capital market from direct equity or mutual funds, we help the economy to grow.

Also, financial assets give the batter returns than real estate and gold in the long run. We, Indians have fear of losing money because we see the volatile market. Our economy is highly dependent on Foreign Institutional Investment(FII).

We have to understand that if there is no volatility in the market, there is no return. Lack of financial literacy is also one of the biggest reasons.

On the other side, Developed countries are highly active in buying financial assets. That’s why their economy becomes stronger.

Learn: Financial Education for FREE

4. MANUFACTURING

Due to higher taxes and strict laws, many companies were not ready to start their manufacturing unit in India. But, now the things are changed.

From the ‘Make in India‘ initiative, we are inviting other companies to start their manufacturing unit. That can also help for employment. But, it takes a time that’s why we have not seen such progress.

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