TFIPOST हिन्दी
TFIPOST Global
Tfipost.com
Tfipost.com
No Result
View All Result
  • Premium
  • Politics
    • All
    • Analysis
    • Opinions
    • Trending
    A Response to Dr. Ruchika Sharma’s Reading of History

    On Truth and Taxes: A Response to Dr. Ruchika Sharma’s Reading of History

    Hinduphobic YouTuber Apologises After Hurting Hindu Sentiments

    Hinduphobic British YouTuber, Who Ate Chicken at ISKCON Restaurant, Apologises After Hurting Sentiments of Millions

    India Makes Big Jump In Henley Passport Index, Visa-Free Entry To 59 Countries Now

    Indian Passport Climbs Up to 77th in Global Ranks: Visa-Free Access to 59 Countries Now Possible

    Mine Collapse in Jharkhand: 9 Dead, State Inaction Blamed

    9 Die in Mine Collapse : Jharkhand Govt’s Failure to Tackle Illegal Mining Exposed Once Again

    • Analysis
    • Opinions
    • Trending
  • Economy
    • All
    • Business
    • Economy1
    • Finance
    Ahead of PM Modi's visit, Cabinet approves free trade agreement between India and UK

    PM Modi to Sign Landmark Free Trade Deal With UK as Cabinet Gives Green Light

    Bengal’s Business Exodus: 6,688 Companies Flee State Since Mamata Took Office

    Bengal’s Business Exodus: 6,688 Companies Flee State Since Mamata Took Office

    US Trade Officials to Visit India in August for Crucial Talks

    US Trade Officials to Visit India in August for Crucial Talks

    Importance And Value Of Brand Logos In A Competitive Market

    Importance And Value Of Brand Logos In A Competitive Market

    • Business
    • Finance
  • Defense
    • All
    • Defence
    • Strategy
    • Weaponry
    BITS Students Build Kamikaze Drones, Power Indian Army

    Kamikaze Drones from Campus Hostel : This is How Two BITS Students Deliver Combat-Ready Drones to Indian Army

    Apache: World’s Most Advanced Attack Helicopter Now in Indian Hands

    Apache Choppers Near Pakistan Border: A Strategic Game Changer for India

    MiG-21 Fighter Jets to Be Retired from Indian Air Force Service by September

    MiG-21 Fighter Jets to Be Retired from Indian Air Force Service by September

    UK F-35B Stealth Jet Finally Departs Kerala Airport After Month-Long Grounding

    UK F-35B Stealth Jet Finally Departs Kerala Airport After Month-Long Grounding

    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • All
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
    Pakistan Offers Protection—Only After 20 Chinese Nationals Die

    Pakistan’s Terror Problem Hits China, After 20 Deaths Shehbaz Makes Empty Promise on ‘Protection’

    Indian Student Seriously Injured in Adelaide, Australia In Racially Motivated Attack: 'F**K off, Indian'

    Indian Student Seriously Injured in Adelaide, Australia In Racially Motivated Attack: ‘F**K off, Indian’

    Indian Assaulted in Dublin in Suspected Racist Attack

    Indian Origin Amazon Employee Assaulted in Dublin, Ireland in Racist Attack

    India Defends Operation Sindoor, Calls Out Pakistan’s Terror Links at UN

    Steeped in Terror, Fanaticism and IMF Debt : India Slams Pakistan at UN

    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • All
    • Culture
    • Education
    • History
    • Indology
    NCERT Textbook Reveals Mughal Religious Intolerance

    Ruthless Babur, Violent Akbar, Destructive Aurangzeb: NCERT Textbook Reveals Mughal Religious Intolerance

    India Built Gardens Long Before Babur Dreamt of Charbagh

    Before the Mughals: India’s Civilisation Built Gardens Long Before Babur Dreamt of Charbaghs

    Revisiting the MANUSMRITI: Why India’s Youth Must Study This Ancient Epic

    Revisiting the MANUSMRITI: Why India’s Youth Must Study This Ancient Epic

    Echoes of the Cholas in Today’s Bharat

    Conqueror of the Seas: Rajendra Chola and the Rise of Naval Bharat

    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • All
    • Books
    • Cinema
    • Entertainment
    • Food
    • Games
    • Health
    • Lifestyle
    • Satire
    • Sports
    • technology
    • Travel
    India Becomes First Country to Digitally Preserve Traditional Medicine Using Artificial Intelligence

    India Becomes First Country to Digitally Preserve Traditional Medicine Using Artificial Intelligence

    Highest RTP Casino Games to Get Better Wins

    Highest RTP Casino Games to Get Better Wins

    How to Use Eyebrow Tinting Kits Like a Salon Expert

    How to Use Eyebrow Tinting Kits Like a Salon Expert

    One in Four Indian Married Couples Are Now Overweight

    ICMR Study: One in Four Indian Married Couples Are Now Overweight or Obese—Shared Lifestyle to Blame

    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
Tfipost.com
  • Premium
  • Politics
    • All
    • Analysis
    • Opinions
    • Trending
    A Response to Dr. Ruchika Sharma’s Reading of History

    On Truth and Taxes: A Response to Dr. Ruchika Sharma’s Reading of History

    Hinduphobic YouTuber Apologises After Hurting Hindu Sentiments

    Hinduphobic British YouTuber, Who Ate Chicken at ISKCON Restaurant, Apologises After Hurting Sentiments of Millions

    India Makes Big Jump In Henley Passport Index, Visa-Free Entry To 59 Countries Now

    Indian Passport Climbs Up to 77th in Global Ranks: Visa-Free Access to 59 Countries Now Possible

    Mine Collapse in Jharkhand: 9 Dead, State Inaction Blamed

    9 Die in Mine Collapse : Jharkhand Govt’s Failure to Tackle Illegal Mining Exposed Once Again

    • Analysis
    • Opinions
    • Trending
  • Economy
    • All
    • Business
    • Economy1
    • Finance
    Ahead of PM Modi's visit, Cabinet approves free trade agreement between India and UK

    PM Modi to Sign Landmark Free Trade Deal With UK as Cabinet Gives Green Light

    Bengal’s Business Exodus: 6,688 Companies Flee State Since Mamata Took Office

    Bengal’s Business Exodus: 6,688 Companies Flee State Since Mamata Took Office

    US Trade Officials to Visit India in August for Crucial Talks

    US Trade Officials to Visit India in August for Crucial Talks

    Importance And Value Of Brand Logos In A Competitive Market

    Importance And Value Of Brand Logos In A Competitive Market

    • Business
    • Finance
  • Defense
    • All
    • Defence
    • Strategy
    • Weaponry
    BITS Students Build Kamikaze Drones, Power Indian Army

    Kamikaze Drones from Campus Hostel : This is How Two BITS Students Deliver Combat-Ready Drones to Indian Army

    Apache: World’s Most Advanced Attack Helicopter Now in Indian Hands

    Apache Choppers Near Pakistan Border: A Strategic Game Changer for India

    MiG-21 Fighter Jets to Be Retired from Indian Air Force Service by September

    MiG-21 Fighter Jets to Be Retired from Indian Air Force Service by September

    UK F-35B Stealth Jet Finally Departs Kerala Airport After Month-Long Grounding

    UK F-35B Stealth Jet Finally Departs Kerala Airport After Month-Long Grounding

    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • All
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
    Pakistan Offers Protection—Only After 20 Chinese Nationals Die

    Pakistan’s Terror Problem Hits China, After 20 Deaths Shehbaz Makes Empty Promise on ‘Protection’

    Indian Student Seriously Injured in Adelaide, Australia In Racially Motivated Attack: 'F**K off, Indian'

    Indian Student Seriously Injured in Adelaide, Australia In Racially Motivated Attack: ‘F**K off, Indian’

    Indian Assaulted in Dublin in Suspected Racist Attack

    Indian Origin Amazon Employee Assaulted in Dublin, Ireland in Racist Attack

    India Defends Operation Sindoor, Calls Out Pakistan’s Terror Links at UN

    Steeped in Terror, Fanaticism and IMF Debt : India Slams Pakistan at UN

    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • All
    • Culture
    • Education
    • History
    • Indology
    NCERT Textbook Reveals Mughal Religious Intolerance

    Ruthless Babur, Violent Akbar, Destructive Aurangzeb: NCERT Textbook Reveals Mughal Religious Intolerance

    India Built Gardens Long Before Babur Dreamt of Charbagh

    Before the Mughals: India’s Civilisation Built Gardens Long Before Babur Dreamt of Charbaghs

    Revisiting the MANUSMRITI: Why India’s Youth Must Study This Ancient Epic

    Revisiting the MANUSMRITI: Why India’s Youth Must Study This Ancient Epic

    Echoes of the Cholas in Today’s Bharat

    Conqueror of the Seas: Rajendra Chola and the Rise of Naval Bharat

    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • All
    • Books
    • Cinema
    • Entertainment
    • Food
    • Games
    • Health
    • Lifestyle
    • Satire
    • Sports
    • technology
    • Travel
    India Becomes First Country to Digitally Preserve Traditional Medicine Using Artificial Intelligence

    India Becomes First Country to Digitally Preserve Traditional Medicine Using Artificial Intelligence

    Highest RTP Casino Games to Get Better Wins

    Highest RTP Casino Games to Get Better Wins

    How to Use Eyebrow Tinting Kits Like a Salon Expert

    How to Use Eyebrow Tinting Kits Like a Salon Expert

    One in Four Indian Married Couples Are Now Overweight

    ICMR Study: One in Four Indian Married Couples Are Now Overweight or Obese—Shared Lifestyle to Blame

    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
No Result
View All Result
Tfipost.com
Tfipost.com
No Result
View All Result
  • Premium
  • Politics
  • Economy
  • Defense
  • Geopolitics
  • Knowledge
  • Law
  • Lounge

Is the Rupee overvalued?

Amit Agrahari by Amit Agrahari
10 October 2018
in Economy
rupee ,overvalued

PC: Moneycontrol

Share on FacebookShare on X

There has been a lot of mayhem over the price of the Rupee depreciating against the US Dollar. The Rupee hit an all-time low on Tuesday because foreign investors pulled out their money as rising crude oil prices deepened concerns about the country’s Current Account Deficit (CAD) and inflation dynamics. The rise in oil prices is a double whammy for India, because along with increases in import bills it is also responsible for the surge in inflation, which also contributes to fluctuations in the value of the Rupee. Due to rising oil prices, the CAD, which is the difference between the inflow and outflow of foreign exchange, widens and oil marketing companies like Indian Oil and Hindustan Petroleum pass the pressure of a rise in prices to the consumer which is in turn is responsible for retail inflation. There is no doubt over the fact that the rupee is devaluating very fast but the real question to ask is whether rupee is undervalued or overvalued in comparison to major currencies of the world.

There are two major ways to access value of a currency. First being nominal exchange rate which is the most popular way. This tells relative price of two currencies which means how many dollars or Euros, a rupee could buy. Most of the countries anchor their currencies according to inflation. The logic behind this is that external value of currency should be in sync with internal value. The inflation differential while compared to rupee depreciation on Compounded Average Growth Rate (CAGR) tells us whether rupee is undervalued or overvalued.

RelatedPosts

Crisil Forecasts Another Rate Cut in FY26, Pegs India’s GDP Growth at 6.5%

Sensex and Nifty Bounces Back After ‘Black Monday’ — What’s Behind the Turnaround?

TN Govt Drops ₹ Symbol From Budget: Linguistic Chauvinism or DMK’s Brain Rot?

Load More

The inflation differential between United States and India over the period of time is higher at 4.2 percent. The reason behind this is ‘fast growing India economy’ in comparison to American economy, for few months after 2007-08 financial crisis American economy actually slowed down. Therefore higher economic growth resulted in rise in inflation in India at faster pace than that of United States. The difference between rupee depreciation in CAGR and inflation differential is well above one point. Therefore rupee is actually overvalued if we compare by this method.

Another way of comparison of currencies is through Purchasing Power Parity (PPP) which is the amount of goods and services some amount of money could buy in a particular country. Most of the services in United States are definitely costlier than in India due to high labor cost in US and many other factors. PPP is very popular for measuring standard of living but what is lesser known is that it could be also used to compare currencies.  Balassa-Samuelson effect on how price levels in any country depend on its average income level, countries with low income level have cheaper services while those with higher income levels have costlier services.

When we compare Rupee with other currencies on PPP basis, Rupee is fairly valued. Currencies of export oriented countries like China and Japan are undervalued. By one measure Rupee is overvalued and by another it is fairly valued. However, these facts offer no relief to Indian policymakers because the media has already manufactured the paranoia among public that INR is undervalued, it is depreciating very fast and the government must do something to stop this. The short sightedness of sections of media and opposition is taking a toll on well being of the country.

Tags: currency fluctuationsexchangeIndian EconomyIndian Rupee
Share175TweetSend
Previous Post

No room for appeasement politics: Yogi Government cancels recruitment of 4,000 urdu teachers

Next Post

Swara Bhasker’s hypocrisy exposed in attempt to shield Varun Grover

Related Posts

Ahead of PM Modi's visit, Cabinet approves free trade agreement between India and UK
Economy

PM Modi to Sign Landmark Free Trade Deal With UK as Cabinet Gives Green Light

23 July 2025

In a landmark step towards deepening bilateral economic ties, the Indian Cabinet has cleared the much-anticipated free trade agreement...

Bengal’s Business Exodus: 6,688 Companies Flee State Since Mamata Took Office
Economy

Bengal’s Business Exodus: 6,688 Companies Flee State Since Mamata Took Office

22 July 2025

In a damning revelation that underscores West Bengal’s deteriorating industrial climate under Chief Minister Mamata Banerjee, the Parliament was...

US Trade Officials to Visit India in August for Crucial Talks
Business

US Trade Officials to Visit India in August for Crucial Talks

22 July 2025

A high-level team from the US is gearing up to visit India in August for the next round of...

Load More

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms of use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Currently Playing

Britain’s Million-Dollar Bird Finally Takes Off!

Britain’s Million-Dollar Bird Finally Takes Off!

00:06:43

Maharashtra targets crypto christians. fake dalit quota scam exposed.

00:04:16

The Forgotten Maratha Legacy in Tamil Nadu

00:07:37

India’s ULRA Bomber: 12,000-km Beast That Can Strike Anywhere Without Refueling

00:07:39

The Shocking Truth About Mass Conversions in Tamil Nadu

00:07:26
Facebook Twitter Instagram Youtube
tfipostTfipost.com
Right Wing | News Analysis | Indian Opinion
  • About us
  • Careers
  • Brand Partnerships
  • Terms of use
  • Privacy Policy
  • Sitemap
MASHABLE IS A GLOBAL, MULTI-PLATFORM MEDIA AND ENTERTAINMENT COMPANY. FOR MORE QUERIES AND NEWS, CONTACT US AT info@mashablepartners.com


©2025 TFI Media Private Limited

No Result
View All Result
  • Premium
  • Politics
    • Analysis
    • Opinions
    • Trending
  • Economy
    • Business
    • Finance
  • Defense
    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
TFIPOST हिन्दी
TFIPOST Global

©2025 TFI Media Private Limited