Saturday, September 27, 2008

Why is dollar appreciating?

I had asked this question here previously.
I finally have the answer. Today's Times of India has the answer though only with reference to the Indian Rupees.

It seems there is a sustained demand for US Dollars because the Foreign Institutional Investors(foreign with respect to India, that is) are selling heavily in the India stock markets and repatriating money. Also the foreign banks are selling their Indian assets to repatriate money to meet liabilties athome.

So there it is. A simple supply and demand situation.

Note: The photograph used belongs to Dani Simmonds. Please go here to see more such photograhs.

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