What Happens If 1₹ = 1$ ?

As we all know that the currency of our country India is Rupee(INR) with symbol "₹".We always compare our currency with dollar.The main reason is that dollar is the medium for currency exchange in the international market.And then we worry about why rupee 's value is very much lower than the dollar.Its always a rise in the currency exchange market for $ vs ₹. 


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             And its always the dollar who won the battle.The facts say that it was 7 rupee=1 dollar when the peg was changed to US Dollar in 1966.From 1947-1966 it was pegged to pounds with value 13 rupees=1 pound. Now after 50 years the value of rupee to dollar is @68 rupees=1 dollar(approximately).Let us look into the journey of Indian rupee over the years.

Many feel really sad by knowing this fact. And many others wish that rupee should equal dollar one day.

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             Now some typical questions arise in our minds such as, is it possible ?When will it happen?And what happens if rupee equals dollar?Well,I'll try to give a satisfactory answers for all these questions in this article.India stands in the top 10 largest economies in the world.And now India is the fastest growing economy in the world.Our stock markets  are doing well and foreign inflows are also good.

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            So is it the right time for Indian currency rupee to bounce back?To answer this question first we should take into consideration the Indian economy. Well the answer for this question is no.Its not the answer from me but most of the economists and people related to finance have this answer with them.Why like this and what if rupee equals dollar overnight?

           For a better explanation let us discuss the pros and cons if 1₹ = 1$.

PROS:

• Imports will become cheaper,as buying goods deals with dollar in international market.
• As imports become cheaper petrol prices will also become cheaper and transportation becomes cheaper in the country.
• Travelling to other countries and staying and studying there also becomes cheaper.
• Luxurious goods and gold which we import will also become cheaper.
• Its like you can get a latest iphone for around 700 rupees.

Now lets see the cons of this scenario.

CONS:

• The first thing is that the exports become too costly.It results in the slow down of exports as other countries may opt the exports from countries which has same products with low currency value.
• There will be no foreign inflows.
• Investments in the IT sector will come down and companies try to find other countries where they can make huge profits.Because no company will afford to pay a software employee nearly one lakh dollars when they can find people who can work for just 3k -5k in other countries.     
• And the companies which are already existing in the country will move out for better profits.
• Finally all these things results in unemployment.

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So as a coin has two sides our currency equaling the dollar also has two sides.That will be the two scenarios if 1₹ = 1$.That's why many economists thinks rupee equating dollar is not affordable for economy like us.They say that the high value of currency doesn't mean that economy is stronger.The most important thing is that rupee shouldn't fluctuate much in the markets.If rupee gains stability @50 or @60 or @70 then the economy will be strong. So lets hope that rupee becomes more stable in the coming years which puts our economy in stronger position.