CERTIFICATE

It is certified that the project work entitled Collapse of dollar value & its impact in India submitted by Manpreet Kaur to Mata Gujri College, Fatehgarh Sahib (An Autonomous college) for the award of degree in Master of Business Administration (MBA), is carried out under my guidance and supervision.

Guide: Assist Prof. Sourav Sharma

DECLARATION

I, Manpreet Kaur, hereby declare that project titled Collapse of dollar value & its impact in India is the outcome of my research work. This research has not been submitted earlier to any institution or university for the award of any degree/diploma. The project report is the result of my own hard work and self belief.

Manpreet Kaur MBA-II Year Mata Gujri College, Fatehgarh Sahib

PREFACE

This report describes the Collapse of dollar value & its impact in India. The idea of preparing this research report comes from our degree of Masters of Business Administration. Theoretical knowledge without the practical exposure is of little value. Theoretical studies in classroom are not sufficient to understand the functioning and nature of the research. Therefore it necessary to undergo any research project work. I complete my research project on the topic Collapse of dollar value & its impact in India. During the research project I got an opportunity to learn valuable things, which I could never been able to learn from theory classes. In nutshell, whole of my report was invaluable experience in the pursuit of knowledge. In the forthcoming pages attempt has been made to present a comprehensive report concerning different aspect of my research. The overall gain to me will be reflected in the report itself. becomes

ACKNOWLEDGEMENT

I, Manpreet Kaur, would like to acknowledge the contributions of the following groups and individuals to the development of my project. I express my sincere gratitude to Prof Kamalpreet kaur (H.O.D.) for giving me the opportunity to work on this project. I feel highly obliged and indebted to my guide Prof. Sourav Sharma of management department, and also to all the faculty members for not only providing the moral and organization support but also for inspiring encouragement during the course of the work. Without their help it wouldnt have been possible for me to accomplish this project in time. Last but not least I wish to avail myself of this opportunity, express a sense of gratitude and love to my friends and my beloved parents for their manual support, strength, and help and for everything.

CONTENTS

Sr. No.
CHAPTER -1 1.1 1.2 1.3 1.4 1.5 1.6 1.7

CONTENTS
INTRODUCTION OF THE TOPIC
Abstract of collapse of dollar value

PAGE NO. 1

Introduction of dollar value The History of the US Dollar What event could trigger a dollar collapse? Factors affecting Indian rupee changes? Impact of dollar fluctuations on the Indian economy Reason for decline vale of Indian rupee in foreign exchange market Meaning of dollar- cost averaging Meaning of GDP components of GDP by expenditure GDP V/S GNP What is GDP and why is it so important? Gross domestic product value REVIEW OF LITERATURE OBJECTIVES METHODOLOGY Objectives Research methodology Need of the study AND RESEARCH

1.8 1.9 1.10 1.11 1.12 1.13 CHAPTER-2 CHAPTER-3

31-36 38-39

3.1 3.2 3.3

CHAPTER-4 CHAPTER-5

ANALYSIS AND INTERPRETATION FINDINGS & CONCLUSION REFERENCES APPENDIX

49-53 54-55 56 57-58

SUMMERY OF COLLAPSE OF DOLLAR VALUE:-

Value averaging, also known as dollar value averaging (DVA), is a technique of adding to an investment portfolio to provide greater return than similar methods such as averaging and random investment. It was developed by former Harvard University professor Michael E. Edleson. Value averaging is a formula-based investment technique where a mathematical formula is used to guide the investment of money into a portfolio over time. With the method, investors contribute to their portfolios in such a way that the portfolio balance increases by a set amount, regardless of market fluctuations. As a result, in periods of market declines, the investor contributes more, while in periods of market climbs, the investor contributes less. In contrast to dollar cost averaging which mandates that a fixed amount of money be invested at each period, the value averaging investor may actually be required to withdraw from the portfolio in some periods. Value averaging incorporates one crucial piece of information that is missing in dollar cost averaging the expected rate of return of your investment. The investor must provide this information for the value averaging formula. Having this data allows the value averaging formula to identify periods of investment over-performance and under-performance versus expectations. After the investment has over-performed, the investor will be required to buy less or sell (selling high). After the investment has under-performed, the investor will be required to buy more (buying low). Research suggests that the method does indeed result in higher returns at a similar risk, especially for high market variability and long time horizons. American financial theorist and money manager William J. Bernstein has stated that value averaging is superior to lump sum investing and dollar cost averaging for deploying a large sum into a portfolio. In this case, Professor Edleson recommends a VA period of three years. He suggests an infusion or withdrawal of capital every three or six months. For example, if one were to win or be bequethed one million dollars, roughly 8.33 percent, with the exact amount being set by the formula, could be invested every quarter. It is important to note that the quarterly or semiannual amount can vary greatly, even resulting in a withdrawal, as mentioned above. Opponents argue that this misses the opportunity of already being fully invested when a large market upswing occurs.

INTRODUCTION OF DOLLAR VALUE:-

The United States dollar (sign: $; code: USD; also abbreviated US$), also referred to as the U.S. dollar or American dollar, is the official currency of the United States of America and its overseas territories. It is divided into 100 smaller units called cents. The U.S. dollar is the currency most used in international transactions and is one of the world's dominant reserve currencies. Several countries use, and in many others it is the de facto currency. It is also used as the sole currency in two British Overseas Territories, the British Virgin Islands and the Turks and Caicos islands. The Constitution of the United States of America provides that the United States Congress shall have the power "To coin money". Laws implementing this power are currently codified in Section 5112 of Title 31 of the United States Code. Section 5112 prescribes the forms in which the United States dollars shall be issued. Those coins are both designated in Section 5112 as "legal tender" in payment of debts. TheSacagawea dollar is one example of the copper alloy dollar. The pure silver dollar is known as the American Silver Eagle. Section 5112 also provides for the minting and issuance of other coins, which have values ranging from one cent to fifty dollars.[18] These other coins are more fully described in Coins of the United States dollar. The Constitution provides that "a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time". That provision of the Constitution is made specific by Section 331 of Title 31 of the United States Code. The sums of money reported in the "Statements" are currently being expressed in U.S. dollars (for example, see the 2009 Financial Report of the United States Government). The U.S. dollar may therefore be described as the unit of account of the United States. The word "dollar" is one of the words in the first paragraph of Section 9 of Article 1 of the U.S. Constitution. In that context, "dollars" is a reference to the Spanish milled dollar, a coin that had a monetary value of 8 Spanish units of currency, or reales. In 1792 the U.S. Congress adopted legislation titled An act establishing a mint, and regulating the Coins of the United States. Section 9 of that act authorized the production of various coins, including "DOLLARS OR UNITSeach to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver". Section 20 of the act provided, "That the money

of account of the United States shall be expressed in dollars, or units... and that all accounts in the public offices and all proceedings in the courts of the United States shall be kept and had in conformity to this regulation". In other words, this act designated the United States dollar as the unit of currency of the United States. The U.S. dollar bill uses the decimal system, consisting of 100 equal cents (symbol ). It is also officially divided into 1,000 mills (symbol ) or ten dimes, while ten dollars is equal to an eagle. However, only cents are in everyday use as divisions of the dollar; "dime" is used solely as the name of the coin with the value of 10, while "eagle" and "mill" are largely unknown to the general public, though mills are sometimes used in matters of tax levies, and gasoline prices are usually in the form of $X.XX9 per gallon, e.g., $3.599, sometimes written as $3.59910. When currently issued in circulating form, denominations equal to or less than a dollar are emitted as U.S. coins while denominations equal to or greater than a dollar are emitted as Federal Reserve notes (with the exception of gold, silver and platinum coins valued up to $100 as legal tender, but worth far more as bullion). Both one-dollar coins and notes are produced today, although the note form is significantly more common. In the past, "paper money" was occasionally issued in denominations less than a dollar (fractional currency) and gold coins were issued for circulation up to the value of $20 (known as the "double eagle," discontinued in the 1930s). The term eagle was used in the Coinage Act of 1792 for the denomination of ten dollars, and subsequently was used in naming gold coins. Paper currency less than one dollar in denomination, known as "fractional currency," was also sometimes pejoratively referred to as "shinplasters." In 1854, James Guthrie, then Secretary of the Treasury, proposed creating $100, $50 and $25 gold coins, which were referred to as a "Union," "Half Union," and "Quarter Union,"[22] thus implying a denomination of 1 Union = $100. Today, USD notes are made from cotton fiber paper, unlike most common paper, which is made of wood fiber. U.S. coins are produced by the United States Mint. U.S. dollar banknotes are printed by the Bureau of Engraving and Printing and, since 1914, have been issued by the Federal Reserve. The "large-sized notes" issued before 1928 measured 7.42 inches (188 mm) by 3.125 inches (79.4 mm); small-sized notes, introduced that year, measure 6.14 inches (156 mm) by 2.61 inches (66 mm) by 0.0043 inches (0.11 mm). When the current, smaller sized U.S. currency was introduced it was referred to as Philippine-sized currency because the Philippines had previously adopted the same size for its legal currency.

The history of the US Dollar

The currency of the United States can be traced back to 1690 before the birth of the country when the region was still a patchwork of colonies. The Massachusetts Bay Colony used paper notes to finance military expeditions. After the introduction of paper currency in Massachusetts, the other colonies quickly followed. Various British imposed restrictions on the colonial paper currencies were in place until being outlawed. In 1775, when the colonists were preparing to go to war with the British, the Continental Congress introduced the Continental currency. However, the currency did not last long as there was insufficient financial backing and the notes were easily counterfeited. Congress then chartered the first national bank in Philadelphia - the Bank of North America - to help with the government's finances. The dollar was chosen to become the monetary unit for the USA in 1785. The Coinage Act of 1792 helped put together an organised monetary system that introduced coinage in gold, silver, and copper. Paper notes or greenbacks were introduced into the system in 1861 to help finance the Civil War. The paper notes used several different techniques including a Treasury seal and engraved signatures to help diminish counterfeiting. In 1863, Congress put together the national banking system that granted the US Treasury permission to oversee the issuance of National Bank notes. This gave national banks the power to distribute money and to purchase US bonds more easily whilst still being regulated. The Federal Reserve Act of 1913 created one central bank and organised a national banking system that could keep up with the changing financial needs of the country. The Federal Reserve Board created a new currency called the Federal Reserve Note. The first federal note was issued in the form of a ten dollar bill in 1914. Finally, a decision by the Federal Reserve board was made to lower the manufacturing costs of the currency by reducing the actual size of the notes by 30%. The same designs were also printed on all dominations instead of individual designs. The designs of the notes would not be changed again until 1996 when a series of improvements were carried out over a ten-year period to prevent counterfeiting. Participating Members The United States Dollar has been adopted, and in some cases used as the official currency, in many different territories and countries. This process of incorporating the currency of one country into a different economic market is called 'dollarization'. Dollarization of the US Dollar has occurred in the British Virgin Islands, East Timor, Ecuador, El Salvador, Marshall Islands, Federated States of Micronesia, Palau, Panama, Pitcairn Islands, and Turks and Caicos Islands.

What Is a Dollar Collapse? A dollar collapse is when the value of the dollar falls so fast that all those who hold dollars panic, and sell them at any cost. In this scenario, sellers would include: foreign governments who hold U.S. Treasuries, traders in exchange rate futures who trade the dollar versus other currencies, and individual investors who demand assets denominated in anything other than dollars. The collapse of the dollar means that everyone is trying to sell their dollar-denominated assets, and no one wants to buy them, driving the value of the dollar down to near zero. What Would Cause the Dollar to Collapse? Several conditions must be in place before the dollar could collapse. First, there must be an underlying weakness. Second, there must be a viable currency alternative for everyone to stampede into. Third, a triggering event would need to occur. The first condition does exist. The dollar declined 54.7% against the euro between 2002 and 2012. Why? The U.S. debt nearly tripled during that time period, from $5.9 trillion to $15 trillion. This increases the chance the U.S. will let the dollar's value slide, allowing it to repay the debt with cheaper money. Is There a Viable Alternative to the Dollar? The dollar became the currency when President Nixon abandoned the standard in the 1970s. The dollar is used for 43% of all cross-border transactions. The dollar's value is strong as measured by central bank reserves -- 61% of these foreign currency reserves are in dollars. The next most popular currency?The euro, which comprises less than 30% of reserves. The Eurozone debt crisis has only weakened the euro as a viable alternative to the dollar as a global currency. China and others have argued for a new global currency. However, replacing the dollar would be a massive undertaking, would require great global resolve and not happen quickly. What Event Could Trigger a Dollar Collapse? Altogether, foreign countries own $5 trillion in U.S. debt (as of December 2011). If China,Japan or other major holders started dumping these holdings of Treasury notes on the secondary market, this could cause a panic leading to collapse. China owns more than $1 trillion in U.S. Treasuries. That's because China pegs its currency, the yuan, to the dollar. This keeps the prices of its exports to the U.S. relatively cheap. Japan owns more than $800 billion in Treasuries, also keeping its currency, the yen, low to stimulate exports to the U.S. Japan is trying to move out of a 15 year deflationary cycle, and the 2011 earthquake and nuclear disaster hasn't helped. China and Japan Can, But Won't, Trigger a Dollar Collapse: Would China and Japan ever really do this? Only if they saw their holdings declining in value too fast AND they had another market to sell their products to. The economies of Japan and

China are dependent on U.S. consumers. They know that if they sell their dollars, their products will cost more in the U.S., and their economies will suffer. Right now, it's still in their best interest to hold onto their dollar reserves. China and Japan are selling more to other Asian countries, who are gradually becoming wealthier. However, the U.S. is still the best market in the world. (See Demand in the U.S. Economy) If the Dollar Collapses, What Would Happen? A sudden dollar collapse would create global economic turmoil as investors rush to other currencies, such as the euro, or other assets, such as gold or other commodities. Demand for Treasuries would plummet, driving up interest rates. Import prices would skyrocket, causinginflation. U.S. exports would be dirt cheap, boosting the economy briefly. Unfortunately, uncertainty, inflation and high interest rates would strangle possible business growth. Unemploymentwould worsen, sending the U.S. back into recession or even creating a depression. How Can I Protect Myself from a Dollar Collapse? Protect yourself from a dollar collapse by first defending yourself from a gradual dollar decline. Keep your assets well-diversified by holding foreign mutual funds, gold and other commodities. A dollar collapse would create global economic turmoil. To respond to this kind of uncertainty, you must be mobile. Keep your assets liquid, so you can shift them as needed. Make sure your job skills are transferable. Update your passport, in case things get so bad for so long that you need to move quickly to another country. Is a Dollar Collapse Imminent? Fortunately, it's highly unlikely that the dollar will collapse. That's because any of the countries who have the power to make that happen (China, Japan and other foreign dollar-holders) don't want it to occur. It's not in their best interest. Why bankrupt your best customer? Instead, the dollar will probably continue to decline gradually, as these countries slowly find other markets. For more, see Dollar Decline or Dollar Collapse? 2002-2007 - The dollar fell 40% as the U.S. debt grew 60%. In 2002, a euro was worth $.87 vs $1.44 by December 2007. (Source: Federal Reserve, Exchange Rates)

The Dollar Value Is Measured by Exchange Rates: The U.S. dollar is most easily measured by its exchange rate, which compares its value to other currencies. Currency exchange rates allow you to determine how much of one currency you can exchange for another. Exchange rates change every day because currencies are traded on the foreign exchange market, known as forex. A currency's forex value depends on a lot of factors, including central bank interest rates, the country's debt levels, and the strength of its economy. Most countries allow their currencies to be determined by the forex market. This is known as a flexible exchange rate.

Dollar Value Compared to Euro:

2012 - The dollar lost value against the euro, as it appeared the euro zone crisis was being managed. By the end of February, the euro was worth $1.3463. 2011 - The dollar's value against the euro fell 10%, and then regained ground. As of December 30, 2011, the euro was worth $1.2973. 2010 - The Greece debt crisis strengthened the dollar. By year end, the euro was only worth $1.32. 2009 - The dollar fell 20% thanks to debt fears. By December, the euro was worth $1.43. 2008 - The dollar strengthened 22% as businesses hoarded dollars during the global financial crisis. By year end, the euro was worth $1.39.

Factors affecting Indian rupee changes? The value of any currency in an economy is hard to bet, to be stable for a long period of time as there are number of factor influencing its appreciation and the depreciation. The currency value of an economy influences the growth rate of GDP in an economy. Several other factors that have a direct influence on the over or the undervaluation of a currency are listed below: Capital flows and the stock market of India It's important to note that in spite of suffering recession, an economy can grow if the capital inflow is constant or continuously rising. In India even if the GDP rate is less, the currency can still get overvalued due to excessive capital inflows made by the FII's in the Indian economy. Global currency trends Like many other currencies Indian rupee have also tied its knot with some of the big economies of the world including the names of UK, US, Japan and Canada. The depreciation or appreciation in the currency any of these, especially in the US dollar, influences the valuation of the Indian

currency in one way or the other. RBI Intervention The valuation 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 valuation of the Indian currency. Oil factors India is a major importer of oil and the valuation of Indian money gets easily affected by the increase in the prices of the crude oil. It can further result in spreading inflation in an economy due to the over valuation of the Indian currency. Political factors Several other factors that affect the currency stability are some political factors like change in the government set up, introduction of new export and import policies, tax rates and many more. Remittances from abroad Conclusively, there are many factors that arise from the economic structure of Indian economy and affect the valuation of the Indian currency that in turn affects the economic growth rate of the economy of a country.

How Dollar Fluctuations Impact the Indian Economy To better understand the fluctuating dollar value against the rupee, let us get to know some basics: Exchange rate the rate at which a currency can be exchanged. It is the rate at which one currency is sold to buy another. Foreign exchange market Also known as Forex or FX. It is a market to trade currencies Indian foreign exchange rate system India FX rate system was on the fixed rate model till the 90s, when it was switched to floating rate model. Fixed FX rate is the rate fixed by the central bank against major world currencies like US dollar, Euro, GBP, etc. Like 1USD = Rs. 40. Floating FX rate is the rate determined by market forces based on demand and supply of a currency. If supply exceeds demand of a currency its value decreases, as is happening in the case of the US dollar against the rupee, since there is huge inflow of foreign capital into India in US dollar

Why is the US dollar walking down? When it comes to the US being a consumer, it has one of the largest appetites in the world. To keep up its demand for consumption, its imports are huge when compared to exports. This created pressure since there were more payments in dollars than receipt of any other currency, which made the supply of the dollar greater for imports payment and less receipt of foreign currency from exports. This resulted in the depreciation of the dollars value, which again caused more outflow of dollar for import payments. This created a state of inflation and made consumables costlier to US. To control inflation US resorted to increase in interest rates to cool down pressure on demand side of consumption. This factor along with recession in all other sectors, particularly real estate, is causing the mighty US dollar to shake. Impact of dollar fluctuations on the Indian economy Until the 70s and 80s India aimed at to be self-reliant by concentrating more on imports and allowing very little exports to cover import costs. However, this could not last long because the oil price rise in the 1970s and 80s created a big gap in Indias balance of payment. Balance of payment (BOP) of any country is the balance resulting from the flow of payments/receipts between an individual country and all other countries as a result of import/exports happening between an individual country, in our case India and rest of the world. This gap widened during Iraqs attempt to take over Kuwait. Thereafter, exports also contributed to FX reserve along with Foreign Direct Investment into the Indian economy and reduced the BOP gap Indian rupee appreciation against dollar impacted heavily to the following: 1. Exporters 2. Importers 3. Foreign investors Exports from India are of handicrafts, gems, jewelry, textiles, ready-made garments, industrial machinery, leather products, chemicals and related products. Since the 1990s, India is the worlds largest processor of diamonds. The mentioned export items contribute substantially to foreign receipts. During the periods when the dollar was moving high against the rupee, exporters stood to gain, when $1 = Rs. 48, was getting them Rs. 4800 for every $100. Since the beginning of the year 2007, rupee appreciated by about 10%. With its value of rupee Rs. 39.35 = $1 as on 16 Nov 2007, for every $100, exporters would get only Rs. 3935. This difference is towing away the profit margins of exporters and BPO service providers alike. Imports to India are of petroleum products, capital goods, chemicals, dyes, plastics, pharmaceuticals, iron and steel, uncut precious stones, fertilizers, pulp paper etc. With the same scenario as given for export, if we analyze - an importer is paying Rs. 3935 now instead of Rs. 4800 paid during yester years for every $100. This gain on FX is likely to create savings in cost, which could be passed on to consumers, thereby contributing to control inflation Foreign investment into India is also contributing well to dollar depreciation against dollar. With the recent liberalized norms on foreign investment policy like Foreign investment of up to 51% equity limit in high priority industries; foreigners & NRIs are allowed to repatriate their profits and capital with exception for Indian nationals who were allowed to do so only under special

circumstances; allowing free usage of export earnings to exporters, made foreign investment in India very attractive. It is this favorable atmosphere which made FX reserve surplus in US dollar and helped rupee to appreciate Conclusively, appreciation and depreciation of rupee cannot certainly be taken as beneficial to the Indian economy in general. On one hand the rupee appreciation will affect exporters, BPOs, etc., on the other, rupee depreciation will affect importers. So now it depends on what the future has to reveal for, how effectively the central bank can balance the FX rates with little impact to the relative areas of FX usage. Can the Dollar remain king or not, is no longer a million dollar question, but a million Rupee question! Comparison of Dollar to Rupee Exchange Rates The Indian Rupee is the official currency of India. Exchange Rates vary by the transaction amount and the method of transfer. The rates and fee shown are for on-line transfer of under $1000 from U.S. to India. Click on the Institution name to view further details on its exchange rate, transaction fee and terms & conditions. Institution Per $

Fees and Comments

Axis Bank +91-22-67074407

$0 fees Indicative Exchange Rate The money can only be transferred in an account with any bank in India 53.88 Bank transfer (ACH mechanism) takes 3-5 business days Online transfer limits: $ 100 min. and $10,000 max. Doesn't accept Cash, Credit or Debit Cards Other transfer mechanisms include Wire Transfer and DD
53.85

Bank of India 1-212-753-6100

$2.50 fees Indicative Exchange Rate Online bank trasnfer (ACH mechanism) takes 3-5 business days

HDFC Bank 1-888-978-4257

Fee of Rs 25; Additional Rs. 0.75 per thousand for non-HDFC bank transfers Indicative Exchange Rate 53.79 Over 1650 locations in India Takes 3 to 4 days. Min: $100 Max: $5000
Remittance Service Charge of $2.00 (inclusive of service tax 53.41 @10.30%) for amounts of $1000 or below Fixed exchange rates

ICICI Bank

1-866-424-2448

ACH mechanism of transfer into any ICICI Bank Remittance card or into any resident Visa Debit Card account issued in India Money deposited into any ICICI bank account with over 2,500 branches in India OR into bank accounts with over 100 banks in India Other Delivery Mechanisms: Demand Draft, Cash

Indian Bank 1-866-688-2156

Fee of $9 for $1000 remittance Indicative Exchange Rate Money can be remitted to an account with any of the partner 53.57 banks or else as a demand draft Remittance limit: $5,000 max. Transfer takes 7 days Fee of $15 for any amount remitted. Fee of $5 for any amount remitted online with the use of promotion code EE72FE02BC Guaranteed Exchange Rate Bank Transfer (ACH mechanism) takes 24-48 hrs for transfer 53.36 Unlimited amount for bank deposit or draft delivery at home Bank draft delivery at home takes 3 days only Xpress Money option delivers cash at agent locations immediately (Rs. 50,000 max.) $0 fees to transfer to any Bank in India Exchange rates are guaranteed, locked-in Regular users of IndusFastRemit are automatically upgraded to faster payments Bank uses ACH mechanism to transfer funds 53.50 It takes 3-4 days before the money is available in the Indian account Other Delivey Mechanisms: By Direct Depost to any IndiusInd Bank account and by Cheque Fee of $5 for $1000 transfer Money can be send to over 90 banks in India Transfer takes 3 working days Other remittance mechanisms include Credit Card, Check and 53.72 Wire Transfer Transfer limit: $1,000 for Credt Card, no limit for both Check and Wire Transfer Money received in India is either as Direct Credit to the bank, Demand Draft at home or Remit2India's Remittance Card

Moneydart 1-866-372-3874

IndusInd Bank 1-860-500-5004

Remit2India 1-888-736-4886

Royal Exchange 1-888-677-6925

54.05

Fee of $12 for $1000 remittance Exchange rates are guaranteed, locked-in ACH mechanism to transfer money online Money can be received as cash There are 3300 branches in India

State Bank of India 1-212-521-3284

Zero for Transfer to SBI Banks Rs 6 for Transfer to non-SBI Banks "Instant Transfer" is the real time rupee remittance facility from SBI account outside India to an SBI in India 53.93 SBI EXPRESS REMIT uses US Automated Clearing House (ACH) network. Takes 5 days. Minimum of $50 up to $10K to an SBI bank and up to $1000 to other banks
53.75

Trans-Fast 1-888-973-6383

Locked-In Exchange Rate Minimum amount to send $50, Maximum amount $2,500 24/7 Customer Service and Live Web Chat Low fees starting at $2.99, Send over $1,000 for Free Bank deposit within 24 hrs, and Cash Pick up in India at over 11,000 locations Accept ACH & Credit Card for payment Remittance can also be made in person at our agent locations, visit our website to find a location

Western Union 1-800-325-6000

The rate shown is for the city of Edison in New Jersey, USA. The exchange rate differs depending on the location of transfer Rate given at the location of transfer is Guaranteed Money in 3 business days: Fees of $10 Best option in case of emergency, money received with-in mins 53.75 Send money by visiting agent location or online direct bank transfer/credit/debit card Receive money by direct credit to a/c or cash pick up at western union agent location Fee of $4.99 if paid with a US Bank account and fee of $29.99 if paid with Debit/Credit card. This fee is based on $1000 transfer. Guaranteed Exchange Rate 53.35 Bank deposits within 24 Hours to most bank accounts in India Other modes of delivery in India: Cash Pickup by recipients, Cash Delivery

Xoom 1-877-815-1531

Non-Resident Indians (NRIs) remitted nearly $52 billion to India last year. But even so, most NRIs wonder if they are using the right service provider for remitting their money. Is it safe to use this service? How long will it take before the money reaches the destination? Am I getting competitive exchange rates? Should I wait for a few days to get better rates? To answer these questions, we have prepared a list shown above and on the left. By clicking on the URLs provided for each, you can access the remittance service of the bank or directly check exchange rate that it currently offers. Use the "exchange rate trend" chart provided by Reserve Bank of India for judging "Should I wait for a few days to send the money?"

Reason for decline value of Indian rupee in foreign exchange market

There are so many reasons of depreciating rupee, but I would like to explain the first one, which is most important. Why dollar is moving up and rupee is going down? There has been a recent fall in rupee since some days ago and a dramatic increase in dollar. First Reason - Dollar is in Demand BRIC countries like India have emerging economy, so a huge percentage of investment in India is from outside the country, especially from US but due to recession in US, big institutions are collapsing and many of them are on the verge of breakdown. They are suffering huge losses in their country. They have to maintain their balance sheets and look strong on all statements, so to recover losses in their country, they are pulling out their investments from India. Due to this pulling out of investment by these big companies from India or in other terms disinvestment, demand of dollar is raising up and rupee is depreciating. There was a huge interest rate differential between India and US. Now RBI is reducing all kind of rates to increase money supply in market, so deposit rates will also move downwards. It will reduce the rate differential between two countries and affect the fixed investment in India in a negative manner. Second reason - Collapse of International Trade If you observe in terms of international trade, commodity prices are crashing at international level. Importers are trying to accumulate dollars, as they have to pay in terms of dollars and at the end demand is increasing against the rupee. This has not happened yet due to lack of confidence in

all kind of markets. Exporters have a very few orders from outside countries, so there is no matter of converting dollar into rupee thereby decreasing demand for rupee. Besides the above-mentioned two reasons, there are many other reasons, which I would like share in the comments section below with you and others. Now 1 USD is at 55.59 Indian rupees and expected to appreciate further due to huge inflows. The major gainers are Indian IT companies including BPOs, call center outsourcing, medical transcription outsourcing, and Indian content writers, especially Indian Adsense publishers who also earn in dollars.

MEANING OF DOLLAR-COST AVERAGING :-

Dollar-cost averaging is a systematic investing technique used to accumulate shares of stock or a mutual fund over many month or years. You invest a specified amount of money to buy shares at a regular interval, say each month, and then you hold them for the long term. As the stock price moves up, a specified dollar amount purchases fewer shares but when the stock price moves down, you buy more shares. The average price per share is computed by dividing the total cost of all shares by the number of shares. Thus, you dollar-cost average. Some buy-and-hold investors use dollar-cost averaging in retirement accounts with dividend reinvestment. And they fund their purchases with payroll deductions or automatic debits from a bank account. All large mutual funds and many brokerage accounts allow such automatic investing. How does Dollar-cost Averaging Work? Here is a simple example of dollar-cost averaging. Suppose you invest $100 each month to buy shares of a stock. The following table shows five monthly purchases at different prices and the resulting number of shares and their value. Dollar-cost Averaging Date March 1 April 1 May 1 June 1 July 1 Price per Share $50 $52 $58 $56 $61 $ Invested $100 $100 $100 $100 $100 # Shares Bought 2.000 1.923 1.724 1.786 1.639 Total # Shares Owned 2.000 3.923 5.647 7.433 9.072 Total $ Value $100.00 $204.00 $327.54 $416.24 $553.41

After five purchases the total amount invested is $500 and you own 9.072 shares. Therefore, the average cost per share is $55.11 ($500/9.072). As of July 1, the 9.072 shares are worth $553.41. Be careful with dollar-cost averaging. It works when prices are on the upside. But if you make repeated purchases on the downside and prices keep falling, you will lose money. Be particularly cautious with individual stocks of poorly-managed companies or stocks whose prices have increased rapidly. These stocks can quickly decline from very high prices to very low prices. For cyclical stocks take your profits when prices are high. Use the Dollar-cost Averaging Calculator to see how dollar-cost averaging performs with any stock.

LITERATURE OF REVIEW:The Dollar Is Falling, and Thats Good News

By TYLER COWEN Published: December 2, 2007

ANXIETY about the dollar continues to spread. The falling greenback is often seen as a sign of an impending recession or the fall of the United States from global leadership. A low dollar simply looks bad. We are, after all, used to judging ourselves against others comparing our salaries with the earnings of our peers, and our homes with those of our neighbors. Were used to thinking it is a big advantage to stand at the top of a numerical list.But when it comes to currencies, a higher value neither brings national success nor predicts future prosperity. The measure of a nations wealth is the goods and services it produces, not the relative standing of its currency. Take a look at 1985-88, when the dollar lost more ground than in the last few years. Those were good times, and the next decade was largely prosperous as well.Todays lower value for the dollar reflects the success of other regions. Europe has shown it can make the European Union and its unified currency work, and thus the euro has become stronger. The Canadian union appears increasingly stable, and that means a higher value for the Canadian dollar. Over all, these geopolitical developments are good for America even if the dollar becomes weaker in relative terms.Many observers have an exaggerated sensitivity to the dollars fall because they spend more time in relatively expensive countries. A shopping trip to London will give an American tourist the feeling that all prices have doubled or even worse. A weekend vacation or conference in nearby Toronto or Montreal may no longer feel like a bargain. Furthermore many price increases from Europe come on luxury goods and thus they fall on wealthy American buyers, who can afford it most easily. Wal-Mart serves a more working-class clientele and it is stocked with goods from Asia, where currency values have remained weaker against the dollar.In the case of the dollar, we need to stop thinking of its value as a marker of economic success. The American economy has its problems, but so far the low value of the dollar has proved more a benefit than a cost.

Currency Crisis! So What Happens If The Dollar And The Euro Both Collapse?
By Michael, on November 26th, 2010

Some analysts are warning that the U.S. dollar is in danger of collapse because of the exploding U.S. government debt, the horrific U.S. trade deficit and the new round of quantitative easing recently announced by the Federal Reserve. Other analysts are warning the the euro is in danger of collapse because of the very serious sovereign debt crisis that is affecting nations such as Greece, Portugal, Ireland, Italy, Belgium and Spain. So what happens if the dollar and the euro both collapse? Well, it would certainly throw the current world financial order into a state of chaos, but what would emerge from the ashes? Would the nations of the world go back to using dozens of different national currencies or would we see a truly global currency emerge for the very first time?Up until recently, the idea of a world currency was absolutely unthinkable for most people. In fact, the notion that all of the major nations around the globe would agree to a single currency still seems far-fetched to most analysts. However, if enough "chaos" is produced by a concurrent collapse of the U.S. dollar and the euro, would that be enough to get the major powers around the world to agree to a new financial world order?Let's hope not, but it is getting hard to deny that we are heading for a major currency crisis, and if the U.S. dollar and/or the euro collapse, the world will certainly never be the same afterwards. In case you missed it, China and Russia made a very big announcement the other day.They told the world that instead of using the U.S. dollar to trade with each other, they will now be using their own national currencies.Most Americans don't realize it, but that is a very, very big deal.The fact that the U.S. dollar has been the primary reserve currency of the world for decades has given the United States a tremendous amount of economic power. But now nations are beginning to lose confidence in the U.S. dollar and they are slowly starting to move away from it.When the Federal Reserve announced a new round of quantitative easing in early November, it created a huge backlash from other nations. For decades, many other countries have been heavily investing in dollardenominated assets, and now they are quite upset that those assets are going to be devalued. Chinese Finance Vice Minister Zhu Guanaco used very strong language in denouncing the Fed's new quantitative easing scheme earlier this month....

Why do dollar rates fluctuate?

Gerard Jackson BrookesNews.Com Monday 2 January 2006 When it comes to exchange rates confusion is the order of the day. When, for example, the Australian dollar was sinking John Stone, former secretary to the Treasury and well-known economic rationalist, summed up the subsequent confusion when he stated we should pay less attention to economic theories (particularly when they are actively promoted self-interested parties in the financial markets) and concentrate on what works (Dollar could use less speculation, Australian Financial Review 20 September 2000).In short, there is no known theoretical explanation for the dollars fall, and by implication this extended to exchange rate movements in general. Stones economic commentary was bound to encourage a call for exchange rate controls and so it did.He told us that economists and merchant bankers had advised the then-government that foreign exchange-markets were inherently self-equilibrating via the benevolent effects of speculators; that domestic producers who found their pricing plans thrown into disarray could always cover through the forward exchange markets; and other such fairy tales.I think it would be fair to conclude from Stone's article that he opposed the lifting of capital controls in 1983 and would not have been sorry to see them reintroduced. His thinking on this subject apparently springs from a fundamental error in the Keynesian approach to balance-of-payments problems, and that is to focus on capital flows and incomes and even the dreaded speculator.Despite his caustic view of the free-market economic advice that overrode his own, it was as right then as Stone was wrong and still is. What was missing from the advice is the same thing that seems to be missing from Stones economic vocabulary, and that is money supply.Money markets will remain in equilibrium (at least within a narrow band) so long as relative money supplies are kept more or less in check. But continual monetary injections will destabilize exchange rates. This is why the kind of exchange rate mayhem which we have experienced was absent during the gold standard, that barbaric relic, as Keynes chose to mischievously call it. And this is why speculation becomes more active: markets begin to anticipate declines in purchasing power. Regardless of Stones sneering reference to speculators, it is not they who are at fault but the central banks.In other words monetary expansion is the root cause of any currency's decline, not greedy speculators..What we have here is the purchasing-power-parity theory of exchange rates that explains their determination in terms of the relative purchasing power of moneys. (Ricardo also developed the same theory). As von Mises put it:Exchange rates are determined by the relative purchasing power per unit of each kind of money.Leaping 404 years to the year 1957 we find a Mr J. J. Polak, a Keynesian and IMF economist, arriving at the same conclusion. Polak tried to integrate money and credit factors into the Keynesian approach. He assumed velocity to be stable and that nominal income would rise if the money supply was doubled.He found that if a country implemented a policy of credit expansion nominal incomes would increase, imports would grow and a current account deficit would emerge. He concluded that money supply changes will induce changes in demands for domestic and foreign goods, services and securities before any significant change in prices occurs. This conclusion is in keeping with the classical theory which saw no reason why domestic prices should precede a fall in the exchange rate.Actually there was absolutely nothing new in Polaks findings. In his

classic Theory of International Trade (1933) Gottfried von Haberler stressed the same point. He in turn had been deeply influenced by his mentor Prof. von Mises who detailed this process in his article the Balance of Payments and Foreign Exchange Rates, published in Mitteilungen des VerbandesOesterreichischerBanken und Bankiers, 1919.(That Polak was unaware of the work of these Austrians not to mention the classical economists amply demonstrates the extent of Keynesian intellectual insularity, of which John Stone et al. seems to be an Australian example).What we basically have is a supply and demand situation. Let us take a quick look at the Australian situation. From August 1993 to August 2000, M1 grew by 107 per cent while the currency grew by 54 per cent. In June 1999 credit was growing at an annual rate of 13 per cent, the highest annual rate since early 1996. It was credit expansion that fuelled consumption, drove down the dollar and caused debt to pile up, not economic growth. In his article, John Stone said he had never actually claimed to be [an economist]. Just as well, considering his articles poor intellectual content. Dr Frank Shostak s highly instructive The trade balance and the value of the dollar what is the relationship?Demonstrates that if our self-appointed free marketers paid some attention to what a real economist had to say on the subject the free market case would be greatly strengthened. Did You Know | Factors that affect gold prices in India Lisa PallaviBarbora
Updated: Mon, May 14 2012. 09 43 PM IST

Do you know the factors that affect gold prices in India? Other than basic jewellery demand, where India is the largest consumer, there are two other factors. International prices Gold works on price parity, which means 10g of gold has the same value all over the world, hence international prices are important. Hedge: Other than for its ornamental purpose (globally jewellery demand accounts for 70-75% of overall gold demand), gold has traditionally been used as an investment asset to protect against political and economic uncertainty. This is because gold is a metal found in pure form and the value of the metal itself does not change over the years, so it can be used to protect against any depreciation in other financial assets which happens at times of uncertainty. This is why historically gold has been used as currency and even though gold is no longer used as a peg against US dollar, governments still maintain high reserves in the sovereign treasuries. To that extent, international prices of gold are affected by economic affairs. For example, if global economic growth is showing an uptrend and financial markets are doing well, demand for gold as an investment (or hedge) will be low as other assets are more in demand. Investment demand for gold in good times is curbed by the fact that the asset neither gives interest nor dividend income and its appeal is just as a store of value. Dollar dynamics: Moreover, gold is used as a hedge against movement in the US dollar (acclaimed as the global currency for trade), which means typically gold prices move inversely

to change in strength or value of dollar. Traders in this commodity consider this aspect seriously while taking positions in gold. Exchange-traded funds (ETFs): Globally, demand for ETFs has increased. Typically, funds are required to maintain the value of ETFs sold in the form of physical gold, driving up overall demand. Indian rupee versus US dollar All commodities are generally traded in US dollars. According to the latest World Gold Council report for 2011, India is the largest consumer of gold; in 2011 we consumed (jewellery and investment demand) around 933 tonnes of gold compared with global consumption of 4,067 tonnes. However, out of a supply of 1,037 tonnes available in India in 2011, we imported 969 tonnes. Given that imported gold is valued in dollars and then later converted to a rupee value for domestic consumption, the rupee-dollar exchange rate is important in determining domestic gold prices. That is why even though international gold prices have corrected in the last two-three months, domestic gold prices have increased. This is because the rupee has depreciated around 8% against the dollar since February this year. That means Indian consumers have to pay roughly that much more (other than duties and taxes imposed locally) to buy gold. If you were to sell the same 10g of gold you buy (in India) in the US, the price you get will be the international price which is lower than the Indian price. As of now, experts feel that for domestic prices, the rupeedollar equation will be the greater determinant.

Dollar Decline or Dollar Collapse?

By Kimberly Amadeo, About.com Guide What are the reasons why the U.S. dollar is declining? Will it hurt or help the U.S. economy? Is it enough to cause a complete collapse of the dollar, as many are warning? Most importantly, what can you do do protect your financial well-being? The dollar declines when it loses value in relationship to foreign currencies. When this happens, the dollar can buy fewer foreign goods, increasing the price for imports and causing inflation. In addition, investors in U.S. Treasury bonds will sell their dollar-denominated holdings. March 28, 2011 - Despite a $250 billion rebuilding cost, Japan doesn't need to sell its U.S. Treasury holdings to reconstruct after its earthquake/tsunami/nuclear disaster. October 25, 2010 - G-20 Meeting Drives Stocks Up, Dollar Down June 21, 2010 - Is the Dollar Losing Its Grip? October 22, 2009 - Will Plummeting Dollar Drive Up Oil Prices? October 12, 2009 - Central Bank Stampede Drives Down Dollar September 30, 2009 - World Bank Head Calls for New Global Currency September 23, 2009 - Could a Dollar Decline Drive Dow to 14,000 in 2010?

August 25, 2009 - How Much of Dow Rally Is Due to Dollar Decline? April 30, 2009 - Could a World Currency Replace the Dollar? June 21, 2009When the Dollar Declines Should You Buy Gold> March 13, 2009 - Is China Threatening to Sell U.S. Treasuries?

Background In 2008, the U.S. current account deficit was $700 billion. Over half of the current accountdeficit is owed to foreign countries and hedge funds. (Source: U.S. Treasury Dept.) Partly as a result of this deficit, the dollar declined 40% between 2002-2008. The dollar strengthened during the recession, as investors sought a relatively safe haven. Since March 2009, however, the dollar has resumed its decline. This is a result of the $14 trillion U.S. debt. Creditor nations, like China and Japan worry that the U.S. government won't really support the value of dollar. Why not? A weaker dollar means that the deficit will not cost the government as much to pay back. Creditor have been gradually changing their assets to other currencies to stem their losses. Many fear that this could turn into a run on the dollar. This would quickly erode the value of your U.S. investments, while increasing inflation.(See Could U.S. Lose Triple AAA Debt Rating?)

How the Rupee movement affects markets

Ashish Gupta, ET Bureau Feb 19, 2012, 07.22AM IST The rupee movement has a significant impact on the bottom lines of corporates. The recent results declared by companies have confirmed this. Last year, due to various reasons, the rupee depreciated significantly. The depreciation in the currency helped bolster the rupee earnings of IT companies. The rupee lost 16 per cent of its value in 2011 and hit a low of Rs 54.30 against the US dollar in December 2011.Due to the positive economic data in the recent past and foreign institutional investor (FII) inflows, the rupee is now strengthening. With the currency now strengthening, the revenues of export-oriented companies could be negatively impacted in the near term.A weak rupee meant the rupee revenue grew much higher as compared to the corresponding dollar revenue growth. Similarly, a depreciation in value helps expand margins. This is because in case of rupee depreciation, the value of the rupee decreases vis-a-vis the US dollar. As such, you get more rupees for a dollar. As the overseas billings may by in dollar terms, the growth in dollar terms may be negligible. However, because of the value depreciation , in case of conversion of the dollar revenue into rupees, there will be significant increases. This increase, in real terms, is due to the currency movement effect. It does not represent real growth in the business. This also applies to import-sensitive companies. Companies with higher import dependence had to suffer because of the rupee decline. They had to shell out more rupees, even though the dollar cost may have remained the same. As normally , companies do not go for a 100 per cent hedging option, all the unhedged exposures had to be met at the prevailing higher rates. This also applies to companies with a high proportion of foreign exchange borrowings . They have to service the debt and also repay the loans. In the past, as overseas borrowing was cheaper

than domestic borrowing, many companies opted for these instruments. One of the main instruments was the foreign currency convertible bond (FCCB). This is a foreign currency bond issued by a domestic company to foreign investors. These are listed on foreign stock exchanges. On maturity of the bond, the holder has the option to either redeem the bond or get it converted to equity shares at a pre-determined price.However, the fall in stock prices has changed the story. Many of these scrips are ruling below the conversion prices. As such, investors would opt for redemption rather than conversion.As most of these liabilities were not hedged, companies were forced to report marked-to-market losses. A weak rupee raised costs for these companies as they had to pay back their bond-holders in foreign currency instead of converting the value into shares. So, investors need to track the forex exposures of companies , before deciding on investing in them. A higher unhedgedforex exposure can be a risky proposition. It is not only the proportion of revenue between rupee and dollar that matters. You also need to see how the capital of the company is built - whether it has a higher proportion of forexbonds in the capital structure.The share prices of such stocks are affected by these facts. The valuation of a company's stock takes into account the forex risks as well because they have a substantial impact on the bottomlines of companies.

Objective: To know about the reasons of the collapse of dollar value. To find out and its impact of indian economy. To study about the trade of.

RESEARCH METHODOLOGY
Research is composed of two syllables, a pre fixre and a verb search means again, a new, over again. Research means to examine closely and carefully, to test and try, to probe. The two words form a noun to describe a careful and systematic study in some field of Knowledge, undertaken to establish facts or principles. Research is an organized and systematic way of finding answers to questions. Redman and Mory defines research as a Systematized effort to gain new knowledge. It may be noted, in the planning and development, that the significance of research lies in its quality and not in quantity. Research methodology is the specification of method of accruing the information needed to structure or solve at hand. It is not concerned to decision of the fact, but also building up to data knowledge and to discover the new facts involved through the process of dynamic change in the society.

PURPOSE OF STUDY The main aim of this research study is to analyze the collapse of dollar value & its impactinindia.The pattern of dollar value is bullish & down & its impact in india. RESEARCH DESIGN: Exploratory in nature

SOURCE OF INFORMATION
COLLECTION OF DATA

PRIMARY SOURCES

SECONDARY SOURCES

MONTHLY PRICE OF DOLLAR 2011 TO 2013 DATE

April 29, 2011

May 31,2011 June 30, 2011 July30,2011 Aug 31, 2011 Sep 30, 2011 Oct 31, 2011 Nov 30, 2011 Dec 30, 2011 Jan 30, 2012 Feb 28,2012 Mar 31, 2012 April 29, 2012 May 31,2012 June 30, 2012 July30, 2012 Aug 31, 2012 Sep 30, 2012 Oct 31, 2012 Nov 30, 2012 Dec 30, 2012 Jan 30, 2013 Feb 28,2013 Mar 31, 2013

PRICE 46.955 44.935 44.8225 44.47 45.44 47.245 49.0925 50.6125 51.89 51.326 49.155 50.24 51.704 54.29 56.08 55.54 55.51 54.57 53.19 54.98 54.71 54.335 54.345 54.4

MONTHLY PRICE OF INFLATION: DATE

April 29, 2011

May 31,2011 June 30, 2011 July30,2011 Aug 31, 2011 Sep 30, 2011 Oct 31, 2011 Nov 30, 2011 Dec 30, 2011 Jan 30, 2012 Feb 28,2012 Mar 31, 2012 April 29, 2012 May 31,2012 June 30, 2012 July30, 2012 Aug 31, 2012 Sep 30, 2012 Oct 31, 2012 Nov 30, 2012 Dec 30, 2012 Jan 30, 2013 Feb 28,2013 Mar 31, 2013

INFLATION 9.68 9.74 9.56 9.51 9.36 9.78 10.00 9.87 9.46 7.74 7.23 7.56 7.69 7.5 7.55 7.58 6.87 7.55 8.07 7.45 7.24 7.18 6.62 6.84

CORRELATION IN DOLLAR & INFLATION

X
-4.749

2 X

Y
22.553

2 Y

xy
3.9601 4.2025 3.4969 3.3124 2.7889 4.3681 5.3361 4.7524 3.1329 0.0025 0.2116 0.0169 0 0.0361 0.0196 0.0121 0.6724 0.0196 0.1444 0.0576 0.2025 0.2601 1.1449 0.7225 -9.45051 -13.8765 -12.8684 -13.1659 -10.4609 -9.31931 -6.03257 -2.37947 0.32922 -0.0189 1.17254 0.19032 0 -0.49134 -0.61264 -0.42196 -6.03257 -0.40124 0.56468 -0.78624 -1.3527 -1.34181 -2.82587 -2.2916

46.955 44.935 44.823 44.47 45.44 47.245 49.093 50.613 51.89 51.326 49.155 50.24 51.704 54.29 56.08 55.54 55.51 54.57 53.19 54.98 54.71 54.335 54.345 54.4
1229.838

-6.769 2019.154 -6.8815 2009.057 -7.234 1977.581 -6.264 -4.459 2232.09 2232.09

-2.6115 2410.074 -1.0915 2561.625 0.186 2692.572 -0.378 2634.358 -2.549 2416.214 -1.464 2524.058 0 2673.304 2.586 2947.404 4.376 3144.966 3.836 3084.692 3.806 3081.36

2.866 2977.885 1.486 2829.176 3.276 3022.8

3.006 2993.184 2.631 2952.292 2.641 2953.379 2.696 2959.36

9.68 9.74 9.56 9.51 9.36 9.78 10 9.87 9.46 7.74 7.23 7.56 7.69 7.5 7.55 7.58 6.87 7.55 8.07 7.45 7.24 7.18 6.62 6.84 197.63

1.99 2.05 1.87 1.82 1.67 2.09 2.31 2.18 1.77 0.05 -0.46 -0.13 0 -0.19 -0.14 -0.11 -0.82 -0.14 0.38 -0.24 -0.45 -0.51 -1.07 -0.85

61351.23

38.8731

-91.8736

X=

X N

= 1229.838/24 = 51.24

Y = Y N =197.63/24 =80.23

r= xy

x2

y2

-91.8736 61351.23*38.8731

= -91.8736/1544.31 = -0.059

REGRESSION OF DOLLAR VS INFLATION

x2

y2 2204.772 2019.154 2009.101 1977.581 2064.794 2232.09 2410.123 2561.676 2692.572 2634.358 2416.214 2524.058 2673.304 2947.404 3144.966 3084.692 3081.36 2977.885 2829.176 3022.8 6838.75 2952.292 2953.379 2959.36 67211.86 93.7024 94.8676 91.3936 90.4401 87.6096 95.6484 100 97.4169 89.4916 59.9076 52.2729 57.1536 59.1361 56.25 57.0025 57.4564 47.1969 57.0025 65.1249 55.5025 52.4176 51.5524 43.8244 46.7856 1659.156

XY 454.5244 437.6669 428.5079 422.9097 425.3184 462.0561 490.93 499.5503 490.8794 397.2632 355.3907 379.8144 397.6038 407.175 423.404 420.9932 381.3537 412.0035 429.2433 409.601 396.1004 390.1253 359.7639 372.096 10044.27

46.955 44.935 44.823 44.47 45.44 47.245 49.093 50.613 51.89 51.326 49.155 50.24 51.704 54.29 56.08 55.54 55.51 54.57 53.19 54.98 54.71 54.335 54.345 54.4
1229.838

9.68 9.74 9.56 9.51 9.36 9.78 10 9.87 9.46 7.74 7.23 7.56 7.69 7.5 7.55 7.58 6.87 7.55 8.07 7.45 7.24 7.18 6.62 6.84 197.63

Y on X

Y = Na + b X

XY = a X + b X2 -4135285.14 -80698.95

A B

X on Y

X = Na + b Y

XY = a Y + b Y2 27452.53 -3327.58

A B

GROSS DOMESTIC PRODUCT VALUE

In the fourth quarter of 2012, India's economy grew only 4.5 percent due to the widespread weakness in farm, mining and manufacturing output. Manufacturing output grew only 2.5 percent, while the mining sector reported an annual fall of 1.4 percent. Farm output gained 1.1 percent. The construction output expanded 5.8 percent and financing, insurance, real estate and business services grew 7.9 percent.

CORRELATION BETWEEN GDP V/S INFLATION 2011 TO 2012 TIME INFLATION GDP

2011 Sep 2012 mar 17.28

9.78 7.5

7.8 6.9 14.7

X=

X/2 =8.64 Y =Y/2 =7.35 r= xy

x2*y2 = 0.208

CORRELATION BETWEEN IFLATION V/S GDP IN 2012 TO 2013

TIME 2012 Sep 2013 sep

INFLATION 7.55 6.84

GDP 5.3 4.5

14.39

9.8

X=

X/2 =7.19 Y = Y/2 = 4.9 r= xy

x2*y2 = +1

CORRELATION BETWEEN EXPORTS V/S DOLLAR

x
1368.57 1041.51 1190.98 1190.39 1173.8 1121.48 1265.2 1164.06 1135.2 1289.51 1299.44 1217.34 1421.73 1216.9 1347.53 1390.13 1261.53 1215.4 1302.14 1215.63 1221.48 1359.5 1389.82 1412.06 30211.33

x 109.77 -217.29 -67.82 -68.41 -85 -137.32 6.4 -94.74 -123.6 30.71 40.64 -41.46 162.93 -41.9 88.73 131.33 2.73 -43.4 43.34 -43.17 -37.32 100.7 131.02 153.26

x2 12049.45 47214.94 4599.552 4679.928 7225 18856.78 40.96 8975.668 15276.96 943.1041 1651.61 1718.932 26546.18 1755.61 7873.013 17247.57 7.4529 1883.56 1878.356 1863.649 1392.782 10140.49 17166.24 23488.63

Y2 -4.286 -6.306 -6.418 -6.771 -5.801 -3.996 -2.148 -0.628 0.649 0.085 -2.086 -1.001 0.463 3.049 4.839 4.299 4.269 3.329 1.949 3.739 3.469 3.094 3.104 3.159 18.3698 39.76564 41.19072 45.84644 33.6516 15.96802 4.613904 0.394384 0.421201 0.007225 4.351396 1.002001 0.214369 9.296401 23.41592 18.4814 18.22436 11.08224 3.798601 13.98012 12.03396 9.572836 9.634816 9.979281

XY -470.474 1370.231 435.2688 463.2041 493.085 548.7307 -13.7472 59.49672 -80.2164 2.61035 -84.775 41.50146 75.43659 -127.753 429.3645 564.5877 11.65437 -144.479 84.46966 -161.413 -129.463 311.5658 406.6861 484.1483 4569.72057

46.955 44.935 44.823 44.47 45.44 47.245 49.093 50.613 51.89 51.326 49.155 50.24 51.704 54.29 56.08 55.54 55.51 54.57 53.19 54.98 54.71 54.335 54.345 54.4
1229.838

X=

X/2

= 1258.79 Y = Y/2 =51.243 r= xy x2*y2 = 4569.72 345.29*234476.4 =0.507

Introduction

The probable error of the coefficient of correlation helps in interpreting its value. With the help of probable error it is possible to determine the reliability of the value of the coefficient in so far as it depends on the conditions of random sampling. The probable error of the coefficient of correlation is obtained as follows: P.E = 0.6745 1-r2 N =0.6745 1-0.257049 408989 = 0.6391

INTERPRETATION: Where r is the coefficient of correlation and N the number of pairs of observations. If the value of r is less than the probable error there is no evidence of correlation, i.e the value of r is not at all significant. If the value of r is more than six times the probable error, the coefficient of correlation is practically certain, i.e the value of r is significant. By adding and subtracting the value of probable error from the coefficient of correlation we get respectively the upper and lower limits with in which coefficient in the population can be expected to lie. Symbolically p = r + P.E Where p denotes correlation in the population. Let us compute probable error, assuming a coefficient of correlation of 0.507and a sampleof pairs of items . we will have

=0.6745 1-0.257049 408989 = 0.6391 The limits of the correlation in the population would be i.e., 0.507+0.6391 instances are quite comman where in acorrelation coefficient of 0.5 or even or even 0.4is obviously considered to be a fairly high degree of correlation by a writer or researcher worker. Yet a correlation coefficient of 0.5 means thet only 25% of variation is explained. A correlation coefficient of 0.4 ,means that only 16% of variation is explained. p = r + P.E

STANDARD ERROR If 0.6745 is omitted from the formula of probable error, we get the standard error , we get the standard error of the coefficient of correlation. The standard error of r therefore is : S.E.r = 1-r2

N = 1-0.257049/4.8989 =0.151

CORRELATION BETWEEN IMPORTS VS DOLLAR x

1541.72 1623.96 2033.63 1833.21 1825.82 1810.46 1893.72 2028.02 1988.61 2094.05 2209.13 1963.63 2129.92 1923.02 2218.14

x2 -516.81 -434.57 -24.9 -225.32 -232.71 -248.07 -164.81 -30.51 -69.92 35.52 150.6 -94.9 71.39 -135.51 159.61 267092.6 188851.1 620.01 50769.1 54153.94 61538.72 27162.34 930.8601 4888.806 1261.67 22680.36 9006.01 5096.532 18362.96 25475.35

y -4.285 -6.305 -6.417 -6.77 -5.8 -3.995 -2.147 -0.627 0.65 0.086 -2.085 -1 0.464 3.05 4.84

y2 18.36123 39.75303 41.17789 45.8329 33.64 15.96003 4.609609 0.393129 0.4225 0.007396 4.347225 1 0.215296 9.3025 23.4256

xy 2214.531 2739.964 159.7833 1525.416 1349.718 991.0397 353.8471 19.12977 -45.448 3.05472 -314.001 94.9 33.12496 -413.306 772.5124

46.955 44.935 44.823 44.47 45.44 47.245 49.093 50.613 51.89 51.326 49.155 50.24 51.704 54.29 56.08

2004.53 2250.8 2078.59 2282.61 2377.59 2277.96 2325.24 2475.94 2214.49 49404.79

55.54 55.51 54.57 53.19 54.98 54.71 54.335 54.345 54.4

1229.838

-54 192.27 20.06 224.08 319.06 219.43 266.71 417.41 155.96

2916 36967.75 402.4036 50211.85 101799.3 48149.52 71134.22 174231.1 24323.52 1248026

4.3 4.27 3.33 1.95 3.74 3.47 3.095 3.105 3.16

18.49 18.2329 11.0889 3.8025 13.9876 12.0409 9.579025 9.641025 9.9856 345.2968

-232.2 820.9929 66.7998 436.956 1193.284 761.4221 825.4674 1296.058 492.8336 15145.88

X=

X/2

= 2058.53291 Y = Y/2 =51.243 r= xy x2*y2 =

15145.88

1248026*345.2968
= 0.729

THE PROBABLE ERROR OF A MEAN Introduction

The probable error of the coefficient of correlation helps in interpreting its value. With the help of probable error it is possible to determine the reliability of the value of the coefficient in so far as it depends on the conditions of random sampling. The probable error of the coefficient of correlation is obtained as follows: P.E = 0.6745 1-r2 N =0.6745 1-0.257049 408989 = 0.6391 INTERPRETATION: Where r is the coefficient of correlation and N the number of pairs of observations. If the value of r is less then the probable error there is no evidence of correlation, i.e the value of r is not at all significant. If the value of r is more than six times the probable error, the coefficient of correlation is practically certain, i.e the value of r is significant . By addingand subdracting the value of probable error from the coefficient of correlation we get respectively the upper and lower limits with in which coefficient in the population can be expected to lie. Symbolically p = r + P.E where p denotes correlation in the population. Let us compute probable error, assuming a coefficient of correlation of 0.729 and a sample of pairs of items . we will have

=0.6745 1- 0.5314 408989 = 1.14575

The limits of the correlation in the population would be i.e., 0.507+0.6391

p = r + P.E

instances are quite comman where in acorrelation coefficient of 0.5 or even or even 0.4is obviously considered to be a fairly high degree of correlation by a writer or researcher worker. Yet a correlation coefficient of 0.5 means thet only 25% of variation is explained. A correlation coefficient of 0.4 ,means that only 16% of variation is explained.

BIBLIOGRAPHY:-

http://evilspeculator.com/?p=28994 http://theeconomiccollapseblog.com/archives/qe3-helicopter-ben-bernanke-makes-it-rain-money http://useconomy.about.com/od/inflation/i/dollar_decline.htm http://useconomy.about.com/u/ua/tradepolicy/Dollar_Impact.htm http://en.wikipedia.org/wiki/Plaza_Accord http://useconomy.about.com/od/inflation/i/dollar_decline.htm http://www.tradingeconomics.com/india/imports http://www.tradingeconomics.com/india/exports