One way to make money from weak rupee – CNBC TV18

The Indian rupee (INR) has weakened by about 3.5% against the US dollar in the last six months. This is good news for investors, especially US-centered mutual funds and stock holders.

How do American-centric investment benefits from depreciation of rupee? As the dollar is stronger, the value of American assets increases when the back is converted to rupee, providing additional returns.

For example, consider an investor who kept ₹ 1 lakh in both an Indian stock and American stock a year ago. If both investments are seen to be 20%, then Indian stock will now be priced at ₹ 1.2 lakh. However, the US stock investment for the appreciation of the dollar will increase to ₹ 1.25 lakhs.

The benefit of additional the 5,000 is due to purely dollar strength-how to give long-term benefits to Indian investors from how currency movements.

In the last one year, the currency movement has contributed 4-5% of the return. In the last three years, the cumulative effects may be as high as 10–15%, which increases the overall profit from the US stock market.

Nikhil Behal, CEO of the Indian shares, explains how the depreciation of the rupee has positively influenced the returns for Indian investors in US-communities assets. US-centric mutual funds and stocks, which invest in assets such as American stock and ETF, benefit the benefits when the rupee weakens against the dollar.

“When the rupee depreciates, the value of these foreign holdings increases in the terms of the rupee,” Behal says. This leads to high returns for Indian investors in US-based assets, even though the American market performance has remained unchanged.

Will currency movements continue to affect returns?

While the ups and downs in the currency have played a role in promoting returns, Behl suggests that the basic things of the market will remain the main drivers of the returns in the future. “Over time, subjects such as sector dynamics, AI and energy companies in the US have improved benchmark indices,” he said.

Investors should focus on long -term development topics and diversify their portfolio to navigate short -term currency innings.

Benefits from hedging or strong dollar?

Given the instability of the currency, many Indian investors would surprise whether they should hedge against the depreciation of the rupee or hug it as an opportunity. Behl suggests a diverse approach, offering a natural defense against weak rupee with American investment.