Appreciation of Indian currency for boosting realty market

Q: Hi, Rupee has appreciated by 4% over Dollar in last 6 months and by 15% from its all-time low of Rs 68.36 in the last 9 months.

Pranab Malakar,

21st May 2014

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Hi,
We all know that real estate sector, being the second most preferred investment category, attracts huge Dollar inflows into the Indian economy. As per the DIPP, Govt. Of India reports 11% of total inflows in Dollar goes into construction and development.

Santosh TR,

21st May 2014

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@santosh,
But do you know that total investments in India from NRI’s, FII and FDI come into two asset classes – equity and real estate. NRIs’ expected rate of return generally differ between 15-18 % and for FDI, it is 20-25% annually. Any change in the Rupee and Dollar exchange rate in the 4-5 % range will not have any significant impact on the inflow of funds.

Suresh,

21st May 2014

@Suresh,
Inflation rate in India is hang around 7-8 %. In the US, it is between 1-2 %. Therefore, any movement in Rupee-Dollar exchange rates between the 5-6 % will not impact real estate investments to large range.

Santosh TR,

21st May 2014

@Santosh,

Seeing the movement of past 6 months people are saying that Rupee-Dollar trend and the formation of stable government at the centre, Rupee will further appreciate from the current level to Rs 55/ Dollar in a year.

Suresh,

21st May 2014

@Santosh,
Even people are expecting that stable government will improved the market sentiments and it will also remove policy partiality in the economy and give boost to many important infrastructure projects stuck due to delay in clearances and lack of political will.

Santosh TR,

21st May 2014