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NeelSharma
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Rising crude prices in global markets is one reason. US oil rose above $70 a barrel for the first time since November 2014 as traders braced for a re-imposition of sanctions on Iran. India imports nearly 80 per cent of the oil it consumes which weighs down on the rupee. The other reason is a strengthening dollar. The dollar stayed near its 2018 peak today after US jobs and wages data did little to water down perceptions of strength in the US economy. Strengthening US economy pulls back money.
Dollar is the most demanding currency in the world. The very important factor why Rupee is loosing its sheen is the fiscal deficit of India. The use of crude oil, the rise of gold prices, the boom of Chinese imports, Indians going for foreign tours, imported cars, electronics etc.
Crude Oil - The number of vehicles in India has shot to N number of times, and even house - maids use a two wheeler for work. There are atleast 2 four wheelers in each middle class and above homes. Everyone has his own personal two or four wheel to drive. Hence, use of crude oil is one reason as we import majority of our crude oil than we extract.
Gold - India and China are largest consumers of Gold in the world - about 40%. China imports only to increase its gold reserves.
India imports gold for Gold reserves and also because Indians consume it heavily for personal use. Gold has shot up from 8000/- to 30000/- rupee per Total in last 20-25 years. Still our consumption. The second easy solution is that we should restrict use of gold by boycotting the buying of gold when gold prices touches it's high. We should stop DONATING TO GOD'S IN THE TEMPLES (ALL RELIGIONS). GOD HAS CREATED GOLD, HE DOES NOT NEEDS IT FROM US. The trustees of all temples never give the perfect reserves they hold, nor Indian Government has ever made any efforts to curb and bring them under RTI. consumption levels are very high. Now, you can judge why rupee is falling continuously as gold rates have multiplied 2.5 times.