NRIs’ expected rate of return generally varies between 15-18 per cent and for FDI, it is 20-25 per cent annually. Any change in the Rupee and Dollar exchange rate in the 4-5 per cent range will not have any significant impact on the inflow of funds.
Inflation rate in India is hovering around 7-8 per cent; in the US, it is between 1-2 per cent. Therefore, any movement in Rupee-Dollar exchange rates between the 5-6 per cent will not impact real estate investments to large extent. However, short-term investors are likely to be impacted on speculation grounds.
Seeing the past six months Rupee-Dollar trend and the formation of stable government at the centre, Rupee will further appreciate from the current level to Rs 55 per Dollar in a year.” The historical trends show that investors want to invest in economy with appreciating currency. This gives double benefit.”
The stable government will lead to improved sentiments and it will also eliminate policy paralysis in the economy and give boost to many important infrastructure projects stuck due to delay in clearances and lack of political will. This in-turn will have positive impact on the CREDIT rating of the Indian economy.