The Indian Rupee-US Dollar Exchange Rate: The Economic Impact of a Strengthening Currency


IBS CDC IBS CDC IBS CDC IBS CDC RSS Feed
 
Case Studies | Case Study in Business, Management, Operations, Strategy, Case Study

ICMR HOME | Case Studies Collection

Case Details:

Case Code : ECON025
Case Length : 21 Pages
Period : 2007
Pub. Date : 2008
Teaching Note :Not Available
Organization : --
Industry : -
Countries : India

To download The Indian Rupee-US Dollar Exchange Rate: The Economic Impact of a Strengthening Currency case study (Case Code: ECON025) click on the button below, and select the case from the list of available cases:



Price:

For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Economics Case Studies
Short Cases Studies
View Detailed Pricing Info
How To Order This Case
Business Case Studies
Case Studies by Area
Case Studies by Industry
Case Studies by Company



Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

<< Previous

Introduction Contd...

Although India had been witnessing strong dollar inflows for some time, the rupee had not appreciated as steeply as it did between September 2006 and July 2007 mainly because on earlier occasions, strong dollar inflows into India usually saw the Reserve Bank of India (RBI)9, India's central bank, intervene in the foreign exchange market and purchase excess dollars so as to minimize volatility in the value of the rupee.

This time around, the RBI chose not to intervene, in order to keep domestic inflation, which had been hovering around 6 percent in early 2007, in check.

While the RBI and the finance ministry were able to tame the inflation rate (inflation fell to 3.52% in August, 2007), the rupee's appreciation affected Indian exporters as Indian goods became more expensive for foreign buyers.

Information technology (IT) and textiles industries were particularly hard-hit, as they were the most dependent on the US.

Leather, sugar, and plantation crops were some of the other sectors that were starting to lose competitiveness. The Indian Micro, Small and Medium Enterprises (MSMEs) were also affected. It was feared that falling export competitiveness would cause substantial job losses...

 Excerpts >>

9] The RBI was established on April 1, 1935. Initially a shareholders' bank, the RBI's functions included regulating the issue of currency notes, maintaining reserves to ensure monetary stability, and operating the credit and currency system of the country.

 

Case Studies Links:- Case Studies, Short Case Studies, Simplified Case Studies.

Other Case Studies:- Multimedia Case Studies, Cases in Other Languages.

Business Reports Link:- Business Reports.

Books:- Textbooks, Work Books, Case Study Volumes.