This is important to note that in spite of suffering depression, an economy can grow if the capital inflow is constant or incessantly rising. In India even if the GDP rate is less, the currency can still get overvalued due to great capital inflows made by the FII’s in the Indian economy. 2. Global currency trends
Like many other money Indian rupee have also tied its knot with some of the big economy of the world as well as the names of UK, US, Japan and Canada. The depreciation or approval in the currency any of these, especially in the US dollar, influences the valuation of the Indian currency in one way or the other. 3. RBI Intervention
The assessment of the Indian currency highly depends on RBI that manages the ‘balance of payments’, slight modification in which can define the over or the under assessment of the Indian currency. 4. Oil factors
India is a major importer of oil and the valuation of Indian money gets with no trouble exaggerated by the increase in the prices of the crude oil. It can further result in spreading inflation in an economy due to the over...