The race between currencies always goes on in currency exchange market. You would have thought about Indian Rupee to be the same value that of the US Dollar, or you have an interest in economics. Also, whether you would have thought that why can’t the government just print more money to develop the economy? In this article, we will look at the same topic.
Before we start, it should be clear to all the readers that the value of currency (high or low) doesn’t directly affect the growth and development of the country and doesn’t imply that a country’s economy is strong. If so, wasn’t true then India’s economy would have been stronger than that of Japan’s (as 1 Indian rupee = 1.5 Yen) but that isn’t the reality. Shocked? Well, it is true.
So let’s look that what would be the results if one Indian Rupee would be equal to one of US Dollar.
1. It will shrink the cost of the goods, making it easier and cheaper for Indian citizens to buy goods in the international markets.
2. It will diminish the costs for imports that is a huge plus point for a developing nation like India.
3. Indian government spend a lot every year for buying Petrol from the foreign countries but because of this upsurge in the value of the Indian Rupee the cost of crude oil will fall too saving a big amount of money which can use for the betterment of the society.
4. If one dollar is equal to one rupee then it means that in Rupees 2,400 you can buy a MacBook air. Crazy, isn’t it?
How good it looks? Aren’t you overwhelmed by seeing these results? However, as a coin has two sides, this situation too has its other one (which is far worse).
1. India attracts foreign investment because of its cheap labour. If companies have to pay the same amount for the work of an Indian citizen, they might choose talent from their own nation.As a result, the country will start losing foreign investment and there will be a financial crisis.
2. The organizations set up in India will stop functioning and millions of people would lose their job.
3. Lesser opportunities and more population will again attract a large population for agriculture and will affect the overall growth and GDP of the country.
A lot of economists say that the lower will the value of Indian Rupee to that of US Dollar the more it will benefit for the country while some economist say that the greater the value of the currency the more will it benefit the country as United States.
However, as India’s imports are more than that of its imports, the condition of one rupee equal to one of US Dollar isn’t affordable for our country.