New Delhi: Buy or sell Indian rupees in cash, and you can do it in minutes, a new app promises.
India’s biggest currency, the Indian rupe, is the world’s highest-valued at nearly $1,500 an ounce.
That’s more than 10 times its current value, which has been driven up by a rally in crude oil prices.
But the currency has fallen more than 80% in the past year as the government has slashed taxes and slashed the amount that businesses can charge customers.
A lot of Indians say they’re scared to hold cash because of a new surge in scams and black market activity.
“You can’t even buy food in India anymore, because the currency is so low,” said Anil P. Dhurandhar, a 26-year-old Indian, who is studying to become a lawyer in Toronto.
Dhurodhar’s father owns a local restaurant, and Dhuros mom, a nurse, runs a local hospital.
They bought $50 in cash and left a $100 note at home.
They were worried about getting scammed by scammers and black-marketeers.
“It was a gamble,” Dhurasad said.
“We had no idea it was going to happen.”
“What can you do if you are scared of what will happen?”
It’s been a good year for the rupee, according to the Indian Central Bank.
In July, the central bank raised interest rates for the first time since February.
And this week, the RBI raised the benchmark rate to 9% for the second time in three months, as the rupees recovery from the sharp drop in crude has begun to fade.
The rupee hit an all-time low of 56.10 per dollar at 4:00 a.m.
ET on Thursday.
But it quickly recovered, trading up about 5% on Friday to 62.90.
“This is a good time for the currency to return to the higher levels it was in 2013,” said Praveen Thakur, chief market strategist at UBS in New York.
“The rupee is recovering from its shock and it looks like this will be a good week for the economy,” he added.
The latest gains came after the government lifted the cap on interest rates to 8%, the first increase in five years.
The central bank has said it is monitoring the Indian economy and inflation closely.
And the government says it has made significant strides in lowering the unemployment rate.
“India is emerging from its worst economic crisis since the 1990s,” the RBI said in a statement on Friday.
“Today is a great day for the country as it continues to work towards recovery and to achieve the ambitious targets set by the Narendra Modi government.”
The rupees rally, however, has not brought the country any closer to full recovery, despite a sharp drop of the economy, said Anand Mohan Singh, senior economic analyst at IHS Global Insight.
“I think that the government will need to make significant reforms to make this a success in the short term,” Singh said.
That said, the government is pushing forward with the reform process, which includes the creation of an agency to regulate the banking system and introduce new regulations for companies that operate in India.
“To date, there has been no action taken by the government to provide sufficient clarity on the proposed changes,” said Manu Kumar, the chief financial officer of the RBI.
The new agency will work to make sure that the new rules will be in line with the law and that the reforms will be enforced.
The bank also plans to introduce new rules on investment banking.
That should help the rupe return to its old highs of about $1.50 per dollar by 2020, but some economists warn that it may not be enough.
“A return to these high levels could take many years, at least until 2020,” said Rajesh Gupta, an economist at Standard Chartered.
“For example, if the ruppies price of a barrel of oil went to $40, then it will take several years to recover to $30,” Gupta said.
With files from the Associated Press and Reuters.