Also, if they are concerned of the exact fiat value, then i highly recommend using a payment processor something like bitpay which offers a guaranteed exchange rate.
However Bitpay cannot peg a value at INR sale rates, that may be a problem.
At this time, isn't USD a better currency to hold as compared to INR.?
USD not better at the moment, it is time to sale USD and buy into INR. Why, because RBI buying cheap rupees now, next, when they will have enough INR, they will drop usd and start buying cheap usd. When central bank in any country playing such games Mercedes Benz Co selling a lot of cars and Mercedes India projecting great sales. These guy knows well how to read forex markets.
For any bank it is win win game, follow the leader.
Hmmm.. I don't think so PW. I disagree with you on this. I agree that RBI does have power to manipulate Indian forex market but very little as much as probably upto a Rupee / dollar.
Forex rates are beyond any central bank of a particular country. It is more of a supply and demand in the international market.
USD is getting stronger day by day because it is recouping from the recession. For instance, the unemployment rate has come down to a little over 7% from the 9.1% in June last year. People are findings jobs which means, they are making money which means USA is importing less and exporting more.
That being the reason, the demand for USD in the international market is increasing due to which it is appreciating.
The source of USD for India or RBI is through software & service exports from Software companies and Call Centers / BPO.
As of 12/Jul, RBI had a little over 252 Billion dollars worth of total foreign currency assets (
http://rbidocs.rbi.org.in/rdocs/Wss/PDFs/02T_C190713F.pdf) out of which approximately 60 - 65% is always known to be USD.
Now if India wants to increase the value of INR, it can bring all US dollar holdings in to the market to exchange with INR / other currencies. If so US dollar falls suddenly to may be about 20 INR. If dollar drops to that low rate against INR, India can make more money with its exports. But in real India or any other country don't want to do this. Because if dollar drops, there will be much more problems. India will get less money for its forex holdings of 252 billion dollars. In addition in future it cannot export any goods to US as US dollar is so cheap, Indian companies cannot sell goods so cheap for export. ( no one is interested to sell their products for half rate) And call centers cannot sustain themselves paying salaries to their employees. Like wise Indian software companies cannot export goods to US for such a cheap rate.
With the impending USA immigration bill that is about to be passed in Senate by end of this year, most of the software companies and BPO market will come to their knees. Companies like Infosys, Wipro, Cognizant and TCS are highly worried about the bill. Infact when U.S Secretary of state John Kerry visited India in June 2013, the main agenda of the meeting between him and the chamber of commerce was to discuss about the immigration bill.
If this happens, in turn RBI will be highly affected as it has to spend USD to import stuff to India however the USD income due to Software Service export will be highly reduced.
So in short, i would say that USD will stay or atleast hover close to 60 INR atleast until the Immigration bill is passed and everyone comes to know how it affects them. People including other countries are holding USD for now.
