Experts believe that a continuing fall in the value of the Indian Rupee against the US dollar could impact the long term economic prospects of the country.

The country's currency has seen a drastic fall in its value in recent months as it fell from the level of about 48 against the dollar to about 53, recording a fall of about 10 per cent. It is believed that the recent fall in value is due to low risk appetite of the investors in the global markets and surge in dollar demand from Indian importers, and S&P's downgrade of India's sovereign rating outlook.

Experts point out that a low value of rupee impacts the ability of Indian businesses to replay foreign loans and also put upward pressure on inflation. The increased current account deficit as also raised concerns about the economic outlook for the company.

India's union Finance Minister Pranab Mukherjee has said that volatility in global commodity prices are to be blamed for the depreciation in the value of rupee. He also said that the worsening balance of payment (BoP) situation in many Asian countries also affected the value of the India rupee against the US dollar. He pointed out that fundamentals in the Indian economy have to be changed to make the growth more sustainable.

The Asian Development Bank (ADB) has said in a new report Asian nations must continue their long-term reform process in the coming year for protecting the region from continuing uncertainties in the global economy.