Relationship B/W FPI & Rupee – Free PDF Download

FDI VS FPI

• When investment is made with an intent of obtaining an ownership stake in a foreign country- FDI.
• In FDI investment is done through transfers of funds, resources, technology etc.
• When the investment is made in the financial assets of a company in foreign country- FPI.
• In FPI investment is done through stock, bonds, etc.

WHAT IS FPI INFLOW & OUTFLOW?

• When foreign investors bring Dollars to India to invest in Equity & Debt market, it is known as FPI inflow.
• When the same investors take their Dollars out from India, it is FPI outflow.
• Since country like India is a developing & fastest growing, usually FPI keep investing in India.

 IMPACT ON RUPEE?

WHAT STEP DOES RBI TAKE TO CONTROL THIS?

• When there is sudden outflow of Dollars and thus our rupee weakens.
• RBI sell dollars from its reserves and purchases rupee.
• Just the opposite happens when there is too much inflow of dollars.

OTHER REASONS BEHIND THE RUPEE’S SHARP FALL

• Growth Slowdown
• China Angle- Yuan fall
• Permanent August fall since last 9 years

Latest Burning Issues | Free PDF

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