CAduniya.com : CA India Blog

P Chidambaram’s tenure as finance minister in the last 54 months saw the Indian economy register 9 per cent plus growth in three consecutive years that resulted in buoyant tax collections. But record-high crude oil prices and populist schemes announced by the Congress-led coalition government eroded many gains achieved in the first four years.

How rupee fluctuations affect your investment.

• If the rupee falls in value, the rupee returns on commodities such as gold increase, (assuming that international gold prices remain constant)
• If the rupee appreciates in value, the rupee returns on gold decline
• An investment in overseas assets will fall in value if the underlying currency depreciates, and investors will tend to lose out
• But a strengthening currency will result in gains for investors in overseas assets such as property and bonds (assuming that asset prices remain constant)