In the name of God

How strong rupee can tame inflation?

Inflation in India and the value of Rupee have direct relationship together, and the value of Rupee affect on inflation in four main factors,

1-the strong Rupee references to strong economy in India and strong economy means the produce of goods and services is very efficiency and the amount of supply exceeds of demand, then the strong of rupee can tame inflation easily.

2- In international trade the value of Rupee in comparison to foreign money means the cost of production decreases because we import raw material and other essential substances for the production in a lower prices and this trade means lower inflation.

3-Deficit imbalance in the international trade or domestic budget lead to government has to borrow very much loan from the central bank or international organizations and this process lead to decrease the value of Rupee , unlike this state if we have surplus in international trade or domestic budget the value of Rupee increase and affect to control the inflation.

4- the amount of cash in the country without the efficiency of production lead to surplus of demand then if we manage the amount of cash and strength the money

We decrease the surplus of demand and finally we can tame the inflation.

Gholam Reza badrimanesh – student of Indian studies.