Why the Rupee needs to appreciate further? Addressing Inflation Rupee is no longer overvalued
On a REER basis, the Indian rupee is estimated to have depreciated to around 99 in 2006 – 07 down from its peak of 102 in July 2005
Reduced Production Cost
Trade Deficit
REER Base Year: 1993 - 94 103
Government External Debt 102
Reduced Foreign Debts
REER
Foreign Acquisition
101 100 99
Cheaper Imported Goods 98
Import based foreign investments Sterilization
97 96 2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
Rupee denominated International debt The Rising Rupee