RE:Will Rupee Appreciate further in a long run ?
by Senthil Kumar on Apr 29, 2007 08:42 PM Permalink
Most of the Asian countries (including India) (except Singapore) use their dollars to purchase US treasury bills. Treasury bills pays about 5% interest. US governments uses that money for developing USA's interest, including war on Iraq.
Lets says every one decides to withdraw money from treasury bills. Now USA 'll print money and give it to them. (It is their currency, they can do what they want!)
When every one withdraws, what you can buy with dollars outside USA decreases. As there is abundance of dollar.
