# Should Indian rupee be devaluated?



## ╬Switch╬ (Oct 12, 2008)

The price of dollar is inflating like anything, so why doesn't the government devaluate the currency to something like 1 Rupee = 1 pound like it was earlier? And keep it fixed.
Or are there more problems involved in it?


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## victor_rambo (Oct 12, 2008)

If 1USD=I rupee, all IT companies shall lose current and business. Many shall become jobless.


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## Stuge (Oct 12, 2008)

hmm what will happen to those who have invested in dollars ?

dude it looks very simple ,but its not .


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## ╬Switch╬ (Oct 12, 2008)

No I mean conversion like making 50 current Rupees equal to 1 new Indian rupee.
And not just altering rates.


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## ravi_9793 (Oct 12, 2008)

If this happens I will be very happy...because I pay in USD, and get paid in INR.

But I think its not under Govnt............ refer here:
*en.wikipedia.org/wiki/Purchasing_power_parity


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## victor_rambo (Oct 12, 2008)

╬Switch╬ said:


> No I mean conversion like making 50 current Rupees equal to 1 new Indian rupee.
> And not just altering rates.


Practically useless.


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## RCuber (Oct 12, 2008)

╬Switch╬ said:


> The price of dollar is inflating like anything, so why doesn't the government devaluate the currency to something like 1 Rupee = 1 pound like it was earlier? And keep it fixed.
> Or are there more problems involved in it?


its not as simple as it sounds 



╬Switch╬ said:


> No I mean conversion like making 50 current Rupees equal to 1 new Indian rupee.
> And not just altering rates.



AFAIK the govt had come up with this kind of a plan before but it was not for india only but the the SE asian countries. They wanted to create currency similar to the Euro in europe. It was a few years back and cannot remember correctly abt this.


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## confused (Oct 12, 2008)

rohan_shenoy said:


> Practically useless.


+1google
offtopic:congo for crossing 1000 posts


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## comp@ddict (Oct 12, 2008)

jus one thing....ruppe ka toh ** value nahi rahi *** ***


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## ╬Switch╬ (Oct 12, 2008)

After reading the PPP article on Wikipedia ,looks like more advanced countries have better conversion rates, but I cant understand Japan's.
And also how can rupee naturally overcome the dollar?


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## mastermunj (Oct 12, 2008)

With the fear of loosing IT jobs and no out sourcing from USA, we should not stop thinking to make 1USD = 1INR.

Its my dream to make this happen.

UK has better currency then US and still they are doing very well, in fact they have many jobs there..

Its about willingness to make things right rather than thinking consequences of making things right.

Jaago India Jaago 

NOTE: This is my personal thought, not meant for hurting anyone, but i assure you all of the day when the above formula will come true.. 1USD = 1INR.


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## victor_rambo (Oct 12, 2008)

^Right now, we cannot think of 1USD=1INR. Let the money flow in due to outsourcing and then we can think of that!



confused said:


> +1google
> offtopic:congo for crossing 1000 posts



Thanks , btw I am goona make it 'young'


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## slugger (Oct 12, 2008)

╬Switch╬ said:


> The price of dollar is inflating like anything, so why doesn't the government devaluate the currency to something like 1 Rupee = 1 pound like it was earlier? And keep it fixed.
> Or are there more problems involved in it?



a bit of mistaken notion you have... at present *rupees is indeed getting devalued*

earlier you had to pay 39 rupees to get a 1 dollar note. now you are paying 49 rupees to get that same 1 dollar USD note. meaning *todays 49 rupees has same value as yesterdays 39 rupees*.

also artifically devaluing rupees will be a disaster - we will have to spend more money to buy goods from other countries as India imports more than it exports. This increas in import cost will b transferred to the consumer, thus *it will raise prices of everyday goods in India.*

China artificially devalues its currency bcos it has a very strong export market. Thus its devalued currency helps it to sell low cost goods to the foreign market.

Also India cannot bring its conversion rtion to Rs.1 = 1 pound without stopping the printing of money. and if you stop prinitng money you will not have any money to buy anything


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## Sukhdeep Singh (Oct 13, 2008)

Deciding conversion rates is not in hand of Govt. Printing More money requires Gold Reseves. Read this to understand

*wiki.answers.com/Q/How_the_currency_exchange_rate_is_calculated


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## maxjaja (Oct 14, 2008)

> The price of dollar is inflating like anything, so why doesn't the government devaluate the currency to something like 1 Rupee = 1 pound like it was earlier? And keep it fixed.
> Or are there more problems involved in it?


why not be a little more ambitious and say 1 rupee = 100 pounds 

look the exchange rate alone is not an parameter of how good an economy is doing and emotions dont play a part in business....the less the value of the rupee - the more attractive it is for investors - which means more jobs or money for india

i dont think rupee valuations are a concern if it is stable or changes gradually in any directions. the only problems are if the changes are very sudden - even the rupee going from high 39s to mid 48 is less than a year is not a concern for rbi right now cos india has good currency reserves - only problem is india's external debt which is around 5% of gdp which comes at a high interest rate - but a proper balance is maintained as of now - so need for revaluation.

and think about it if india decides to make 1 rupee 50 rupees (or 85 incase u want it as pound)  of yesterday - cant other countries decide the same and reset thier currincies back to 1 pound as 85 rupees or anything like that

look at japan - 1 dollar = 100 yen now (was 120 few days back) but it is more bigger economy than UK and more Per capita income than US - so rupee valuation is a seriously non issue - live with it rather than changing it


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## ╬Switch╬ (Oct 14, 2008)

Sukhdeep Singh said:


> Deciding conversion rates is not in hand of Govt. Printing More money requires Gold Reseves. Read this to understand
> 
> *wiki.answers.com/Q/How_the_currency_exchange_rate_is_calculated


Very nice article.


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