Dollar in Doldrums: Even the US investors are investing in rupees

Decline in the value of the Indian rupee (INR) against the dollar from 55 to 69 in short term, made domestic importers, stock market and even commoners run for cover and now the US citizens are facing the same scenario.

The recent drama of the US politician’s shut down the government and even brought the country on the verge of defaulting on its debt obligations. US Federal Reserve would consequently continue to print dollar in the guise of QE i.e. bond buying program. As a result, the dollar hit 9 month low.

The US pensioners now feel that dooms day is near. Apparently, they have started investing their savings in foreign currencies like Australian dollar, Brazilian real and Canadian dollar and even in the Indian rupee. They believe that now US dollar would lose its value. Central bank is printing dollar in such a way that there won’t be tomorrow. Currently, the biggest inflow of foreign currency in the US is coming through the Japan Yen trust and the market makers of INR/USD exchange traded notes. Investors are worried about default, or about debt levels and the amount of money in circulation, or about something else taking over as the world’s reserve currency.

But no matter what your views of the dollar, you should be diversified, and not hold all your investments in one currency. Ultimately, all global central banks are keeping their foreign currency reserve in different currencies. After green back, they are keeping their foreign currency reserve in euro, British pound, Japanese yen or Canadian dollar. Foreign currency Certificate of Deposit (CDs) gives more yield that any bank product or deposit of the US. One thing is clear that if you are really frightened with your country’s currency or the USD, you must keep some money in foreign currencies. Such action would provide some safety and relief to your mind. If you are afraid about dollar or other currency crashing rapidly, then you must keep other foreign currency in cash. Such advice is being given to the US investors by their investment managers.


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