The USD to INR reached a new intraday low of 82.80 and ended below the 82 level
The rupee reached a new intraday low of 82.80 and ended below the 82 level. The Fed (the Federal Reserve Board which controls the U.S. government’s central banking system) will be more active in its activity as a result of the US inflation rate rocketing to record highs of 8.6 percent in May, the highest level since December 1981.
NRI’s and Foreign investors find India a easy approach investment avenue to earn higher returns on their investments
Foreign Investment- With a rising Dollar index, NRI’s and foreign investors find India a easy investment avenue to earn higher returns on their investments. As such, FDI flow in Real Estate and increase in Travel, International Tourism, Hospitality sector, Export goods orders rises into the Indian economy and this all contribute to economic growth. The flow of capital to companies from their international joint venture partners goes up as FDI increase. This can improve companies’ growth and expansion.
The price of gold would fall
Changes in metal prices- It has been historically observed that gold prices move inversely with the price of the dollar. So, if the Dollar index increases and the dollar appreciates, the price of gold would fall and vice-versa. This price movement of gold impacts the demand and supply of gold and, as such, impacts the Indian economy.
