Nikunj Soni

Rupee falls at Rs 52 a dollar. Do we even care for such news? We leave it to NRIs to worry about the exchange rate. For domestic investors, does rupee fluctuation hardly make any difference? Most investors do not read between the lines regarding how rupee fluctuation impacts their investments. Moreover, the exchange rate phenomenon seems esoteric for most of the common investors. In this article we will discuss some aspects of rupee fluctuation on our investment. Currency fluctuation There are mainly two ways by which currency rates are managed. Firstly, countries fix their currency against dollar. Hence the exchange rate doesn't change. Government takes action to manage any fluctuation that may happen. Secondly, countries leave it to the market to decide their exchange rate. In such a system, countries follow policy of non-interference. India doesn't have a fixed value of rupee against dollar but it also doesn't keep its currency completely floating against dollar. We hav...