In the last few days, I noticed a big crash in the crypto market. I was expecting a great pump this year in the crypto market but instead, there are some sudden crashes and the price is unpredictable. Mostly Bitcoin is looking good but we need a pump in altcoins. There can be several reasons why the Dollar value is increasing against the Indian Rupee mostly because of the difference in interest value. If there is a high demand for USD against Rupee, then a lot of money will go outside and the value of Rupee will start going down as the demand is low.
I used to wonder if our small market in India could make a difference in this, but these games are all mostly for the big players. If the US has an attractive economy, then people will want to invest in the US economy instead of their own, and money will start flowing over there. People from other countries will start investing in US stocks or bonds.
Contributing factors in India
I think corruption can be one of the biggest reasons for this because many politicians and other people who have a lot of money usually keep their businesses outside India and sometimes invest a lot of money in US dollars instead of Rupee. This can silently create a huge demand for US dollars dropping the value of the Indian Rupee. But we cannot know for sure because the corrupted individuals not just keep their money as USD but they might use other country coins too. It is hard to predict.
Other contributing factors such as inflation, lack of growth, political situation, etc can be responsible for the price fluctuation. We can hardly do something about this. If there is a high inflation problem, people might move their assets to US Dollars.
Import export problem
Either it is a physical export or a service export and import, the reason for the value being this low can be because we are importing more compared to what we are exporting. To pay for the imports we are doing, we might have to purchase foreign currencies. This transaction will be in USD and most likely we will have to buy a lot of USD to settle the deals and this can increase the value of USD as opposed to Indian Rupee.
The needs in India have changed a lot and that's one of the primary reasons why we are importing a lot of goods from other countries. Thankfully at least we can make our food. When we import a lot of things from outside, there can be situations where we might have to buy USD to settle them.
Ultimately it can be a good thing for people who are living in the US and making money in the US. If they would like to liquidate some money, they will get a good value in Rupee. But the value might keep increasing and can become equivalent to pounds in the UK maybe or even some bigger coins from other countries.
If you like what I'm doing on Hive, you can vote me as a witness with the links below.
as a Hive Witness 
as a Hive Engine Witness
 |
 |
 |