Here are some reasons that depict the fall of Rupee against the Dollar.
1. The rupee slumped to a fresh record low of 71 against the dollar for the first time ever by falling 26 paise on persistent demand for the US currency amid rising crude prices.
2. Imported goods like computers, mobile phones and crude oil may get costlier.
3. This may prompt oil companies to hike petrol and diesel prices too.
4. Costlier transport fuel will knock up prices of most goods and stoke inflation.
5. Elevated inflation may prompt RBI to raise lending rates.
6. High-interest rates may push up home loan EMIs.
Besides these point i want to add one more point which is common in India.
In India most of the children save their money in their piggy bank. but when it happened in large scale,
the money get locked over the supply.
Different measures of money supply. Not all of them are widely used and the exact classifications depend on the country.
M0 and M1, also called narrow money, normally include coins and notes in circulation and other money equivalents that are easily convertible into cash.
M2 includes M1 plus short-term time deposits in banks and 24-hour money market funds.
M3 includes M2 plus longer-term time deposits and money market funds with more than 24-hour maturity. The exact definitions of the three measures depend on the country.
M4 includes M3 plus other deposits. The term broad money is used to describe M2, M3 or M4, depending on the local practice.
Which means Hurdle created at First stage in our Money Supply System. Most of the shopkeeper has a thousands of coins. And the public is suffering with the shortage of coins.
In India most of the jewellers also use such coins to make ornaments with the material of coins.
We know that government did not banned 50 paisa coin. but today nobody is about to take the 50 paisa coin. Why we are doing so.
We must understand our economy and must have participate to remove these negative aspects in our society.
Thanks for reading this article.....
