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Is this money-making method legal?
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In advance, let me just state that I'm a normal, 14-year old brainfarter and that this post might sound a bit stupid to most of the adult experts on this site. Please bear with me here.
Can a person buy a foreign currency using the currency his own country, and then sell it when his currency's value goes down?
Say, I exchanged 44,820 INR for 1,000 USD in 2010, when 44.82 INR = 1 USD. Now that the value of the INR has fallen, I can exchange this 1,000 USD for 72,300 INR. Essentially I have made of profit of 27,480 INR doing nothing.
Is this method legal? Are there people who use this method to make money?
india foreign-exchange
edited 4 hours ago
Dheer
47.4k958139
asked 5 hours ago
user5011
1084
New contributor
user5011 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |Â
up vote
1
down vote
favorite
In advance, let me just state that I'm a normal, 14-year old brainfarter and that this post might sound a bit stupid to most of the adult experts on this site. Please bear with me here.
Can a person buy a foreign currency using the currency his own country, and then sell it when his currency's value goes down?
Say, I exchanged 44,820 INR for 1,000 USD in 2010, when 44.82 INR = 1 USD. Now that the value of the INR has fallen, I can exchange this 1,000 USD for 72,300 INR. Essentially I have made of profit of 27,480 INR doing nothing.
Is this method legal? Are there people who use this method to make money?
india foreign-exchange
edited 4 hours ago
Dheer
47.4k958139
asked 5 hours ago
user5011
1084
New contributor
user5011 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |Â
up vote
1
down vote
favorite
up vote
1
down vote
favorite
In advance, let me just state that I'm a normal, 14-year old brainfarter and that this post might sound a bit stupid to most of the adult experts on this site. Please bear with me here.
Can a person buy a foreign currency using the currency his own country, and then sell it when his currency's value goes down?
Say, I exchanged 44,820 INR for 1,000 USD in 2010, when 44.82 INR = 1 USD. Now that the value of the INR has fallen, I can exchange this 1,000 USD for 72,300 INR. Essentially I have made of profit of 27,480 INR doing nothing.
Is this method legal? Are there people who use this method to make money?
india foreign-exchange
edited 4 hours ago
Dheer
47.4k958139
asked 5 hours ago
user5011
1084
New contributor
user5011 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
In advance, let me just state that I'm a normal, 14-year old brainfarter and that this post might sound a bit stupid to most of the adult experts on this site. Please bear with me here.
Can a person buy a foreign currency using the currency his own country, and then sell it when his currency's value goes down?
Say, I exchanged 44,820 INR for 1,000 USD in 2010, when 44.82 INR = 1 USD. Now that the value of the INR has fallen, I can exchange this 1,000 USD for 72,300 INR. Essentially I have made of profit of 27,480 INR doing nothing.
Is this method legal? Are there people who use this method to make money?
india foreign-exchange
india foreign-exchange
edited 4 hours ago
Dheer
47.4k958139
asked 5 hours ago
user5011
1084
New contributor
user5011 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 4 hours ago
Dheer
47.4k958139
asked 5 hours ago
user5011
1084
New contributor
user5011 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 4 hours ago
Dheer
47.4k958139
edited 4 hours ago
Dheer
47.4k958139
edited 4 hours ago
Dheer
47.4k958139
47.4k958139
asked 5 hours ago
user5011
1084
New contributor
user5011 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 5 hours ago
user5011
1084
asked 5 hours ago
user5011
1084
1084
New contributor
user5011 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New contributor
user5011 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
user5011 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |Â
add a comment |Â
3 Answers
3
active
oldest
votes
up vote
4
down vote
accepted
Is this method legal? Are there people who use this method to make money?
This depends on the intent. As per Foreign Exchange Management Act, an individual cannot trade in FX. There are specific licenses required and governed by Reserve Bank of India.
However one can hold small amount of Foreign currency in cash; and can make the prescribed profit like you mentioned.
I exchanged 44,820 INR for 1,000 USD in 2010, when 44.82 INR = 1 USD. Now that the value of the INR has fallen, I can exchange this 1,000 USD for 72,300 INR
You have factor inflation and other investment opportunities that would have resulted in similar returns. i.e. Fixed Deposit rates were around 10% in 2010.
answered 4 hours ago
Dheer
47.4k958139
add a comment |Â
up vote
1
down vote
This method is just a variant over buying cheap stocks and selling them again when and if they have risen in value.
It might work, or it might not work.
answered 4 hours ago
glglgl
38319
But is it legal? Won't this affect the buyer's country's economy?
– user5011
4 hours ago
1
@user5011 If it affects the economy or not, depends on the value you are buying/selling and on the size of the country's economy. If it is legal or not, depends on your local laws, as well as if you are holding the money in a (foreign currency) account or in cash.
– glglgl
4 hours ago
add a comment |Â
up vote
0
down vote
It is legal and you can do it if you want to, but it is risky. Currency speculation has been happening for centuries. If you guess correctly, you can make a tidy profit. But you could just as easily lose. If you use a local exchange, you will pay a fee each time you exchange currencies, so you won't earn the full value of the difference. There may be tax consequences as well, depending on where you live and how the money is exchanged, which will also reduce your profits.
answered 4 hours ago
DSway
511311
3
Fx trading is illegal in India. Rupee is convertible on current account and not on capital account. An FX trading can create an obligation that can potentially lead to a loop hole of moving funds from capital account to outside India
– Dheer
4 hours ago
@Dheer - Sounded like the OP was asking if he could go to the exchange and trade currency. Foreigners do that on the way in (USD to INR) and on the way out (INR to USD) and could gain or lose on the exchanges depending on what happens while they're there. Are you saying it's against the law for locals to do the same thing?
– DSway
4 hours ago
add a comment |Â
3 Answers
3
active
oldest
votes
3 Answers
3
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
4
down vote
accepted
Is this method legal? Are there people who use this method to make money?
This depends on the intent. As per Foreign Exchange Management Act, an individual cannot trade in FX. There are specific licenses required and governed by Reserve Bank of India.
However one can hold small amount of Foreign currency in cash; and can make the prescribed profit like you mentioned.
I exchanged 44,820 INR for 1,000 USD in 2010, when 44.82 INR = 1 USD. Now that the value of the INR has fallen, I can exchange this 1,000 USD for 72,300 INR
You have factor inflation and other investment opportunities that would have resulted in similar returns. i.e. Fixed Deposit rates were around 10% in 2010.
answered 4 hours ago
Dheer
47.4k958139
add a comment |Â
up vote
4
down vote
accepted
Is this method legal? Are there people who use this method to make money?
This depends on the intent. As per Foreign Exchange Management Act, an individual cannot trade in FX. There are specific licenses required and governed by Reserve Bank of India.
However one can hold small amount of Foreign currency in cash; and can make the prescribed profit like you mentioned.
I exchanged 44,820 INR for 1,000 USD in 2010, when 44.82 INR = 1 USD. Now that the value of the INR has fallen, I can exchange this 1,000 USD for 72,300 INR
You have factor inflation and other investment opportunities that would have resulted in similar returns. i.e. Fixed Deposit rates were around 10% in 2010.
answered 4 hours ago
Dheer
47.4k958139
add a comment |Â
up vote
4
down vote
accepted
up vote
4
down vote
accepted
Is this method legal? Are there people who use this method to make money?
This depends on the intent. As per Foreign Exchange Management Act, an individual cannot trade in FX. There are specific licenses required and governed by Reserve Bank of India.
However one can hold small amount of Foreign currency in cash; and can make the prescribed profit like you mentioned.
I exchanged 44,820 INR for 1,000 USD in 2010, when 44.82 INR = 1 USD. Now that the value of the INR has fallen, I can exchange this 1,000 USD for 72,300 INR
You have factor inflation and other investment opportunities that would have resulted in similar returns. i.e. Fixed Deposit rates were around 10% in 2010.
answered 4 hours ago
Dheer
47.4k958139
Is this method legal? Are there people who use this method to make money?
This depends on the intent. As per Foreign Exchange Management Act, an individual cannot trade in FX. There are specific licenses required and governed by Reserve Bank of India.
However one can hold small amount of Foreign currency in cash; and can make the prescribed profit like you mentioned.
I exchanged 44,820 INR for 1,000 USD in 2010, when 44.82 INR = 1 USD. Now that the value of the INR has fallen, I can exchange this 1,000 USD for 72,300 INR
You have factor inflation and other investment opportunities that would have resulted in similar returns. i.e. Fixed Deposit rates were around 10% in 2010.
answered 4 hours ago
Dheer
47.4k958139
answered 4 hours ago
Dheer
47.4k958139
answered 4 hours ago
Dheer
47.4k958139
answered 4 hours ago
Dheer
47.4k958139
47.4k958139
add a comment |Â
add a comment |Â
up vote
1
down vote
This method is just a variant over buying cheap stocks and selling them again when and if they have risen in value.
It might work, or it might not work.
answered 4 hours ago
glglgl
38319
But is it legal? Won't this affect the buyer's country's economy?
– user5011
4 hours ago
1
@user5011 If it affects the economy or not, depends on the value you are buying/selling and on the size of the country's economy. If it is legal or not, depends on your local laws, as well as if you are holding the money in a (foreign currency) account or in cash.
– glglgl
4 hours ago
add a comment |Â
up vote
1
down vote
This method is just a variant over buying cheap stocks and selling them again when and if they have risen in value.
It might work, or it might not work.
answered 4 hours ago
glglgl
38319
But is it legal? Won't this affect the buyer's country's economy?
– user5011
4 hours ago
1
@user5011 If it affects the economy or not, depends on the value you are buying/selling and on the size of the country's economy. If it is legal or not, depends on your local laws, as well as if you are holding the money in a (foreign currency) account or in cash.
– glglgl
4 hours ago
add a comment |Â
up vote
1
down vote
up vote
1
down vote
This method is just a variant over buying cheap stocks and selling them again when and if they have risen in value.
It might work, or it might not work.
answered 4 hours ago
glglgl
38319
This method is just a variant over buying cheap stocks and selling them again when and if they have risen in value.
It might work, or it might not work.
answered 4 hours ago
glglgl
38319
answered 4 hours ago
glglgl
38319
answered 4 hours ago
glglgl
38319
answered 4 hours ago
glglgl
38319
38319
But is it legal? Won't this affect the buyer's country's economy?
– user5011
4 hours ago
1
@user5011 If it affects the economy or not, depends on the value you are buying/selling and on the size of the country's economy. If it is legal or not, depends on your local laws, as well as if you are holding the money in a (foreign currency) account or in cash.
– glglgl
4 hours ago
add a comment |Â
But is it legal? Won't this affect the buyer's country's economy?
– user5011
4 hours ago
1
@user5011 If it affects the economy or not, depends on the value you are buying/selling and on the size of the country's economy. If it is legal or not, depends on your local laws, as well as if you are holding the money in a (foreign currency) account or in cash.
– glglgl
4 hours ago
But is it legal? Won't this affect the buyer's country's economy?
– user5011
4 hours ago
But is it legal? Won't this affect the buyer's country's economy?
– user5011
4 hours ago
1
1
@user5011 If it affects the economy or not, depends on the value you are buying/selling and on the size of the country's economy. If it is legal or not, depends on your local laws, as well as if you are holding the money in a (foreign currency) account or in cash.
– glglgl
4 hours ago
@user5011 If it affects the economy or not, depends on the value you are buying/selling and on the size of the country's economy. If it is legal or not, depends on your local laws, as well as if you are holding the money in a (foreign currency) account or in cash.
– glglgl
4 hours ago
add a comment |Â
up vote
0
down vote
It is legal and you can do it if you want to, but it is risky. Currency speculation has been happening for centuries. If you guess correctly, you can make a tidy profit. But you could just as easily lose. If you use a local exchange, you will pay a fee each time you exchange currencies, so you won't earn the full value of the difference. There may be tax consequences as well, depending on where you live and how the money is exchanged, which will also reduce your profits.
answered 4 hours ago
DSway
511311
3
Fx trading is illegal in India. Rupee is convertible on current account and not on capital account. An FX trading can create an obligation that can potentially lead to a loop hole of moving funds from capital account to outside India
– Dheer
4 hours ago
@Dheer - Sounded like the OP was asking if he could go to the exchange and trade currency. Foreigners do that on the way in (USD to INR) and on the way out (INR to USD) and could gain or lose on the exchanges depending on what happens while they're there. Are you saying it's against the law for locals to do the same thing?
– DSway
4 hours ago
add a comment |Â
up vote
0
down vote
It is legal and you can do it if you want to, but it is risky. Currency speculation has been happening for centuries. If you guess correctly, you can make a tidy profit. But you could just as easily lose. If you use a local exchange, you will pay a fee each time you exchange currencies, so you won't earn the full value of the difference. There may be tax consequences as well, depending on where you live and how the money is exchanged, which will also reduce your profits.
answered 4 hours ago
DSway
511311
3
Fx trading is illegal in India. Rupee is convertible on current account and not on capital account. An FX trading can create an obligation that can potentially lead to a loop hole of moving funds from capital account to outside India
– Dheer
4 hours ago
@Dheer - Sounded like the OP was asking if he could go to the exchange and trade currency. Foreigners do that on the way in (USD to INR) and on the way out (INR to USD) and could gain or lose on the exchanges depending on what happens while they're there. Are you saying it's against the law for locals to do the same thing?
– DSway
4 hours ago
add a comment |Â
up vote
0
down vote
up vote
0
down vote
It is legal and you can do it if you want to, but it is risky. Currency speculation has been happening for centuries. If you guess correctly, you can make a tidy profit. But you could just as easily lose. If you use a local exchange, you will pay a fee each time you exchange currencies, so you won't earn the full value of the difference. There may be tax consequences as well, depending on where you live and how the money is exchanged, which will also reduce your profits.
answered 4 hours ago
DSway
511311
It is legal and you can do it if you want to, but it is risky. Currency speculation has been happening for centuries. If you guess correctly, you can make a tidy profit. But you could just as easily lose. If you use a local exchange, you will pay a fee each time you exchange currencies, so you won't earn the full value of the difference. There may be tax consequences as well, depending on where you live and how the money is exchanged, which will also reduce your profits.
answered 4 hours ago
DSway
511311
answered 4 hours ago
DSway
511311
answered 4 hours ago
DSway
511311
answered 4 hours ago
DSway
511311
511311
3
Fx trading is illegal in India. Rupee is convertible on current account and not on capital account. An FX trading can create an obligation that can potentially lead to a loop hole of moving funds from capital account to outside India
– Dheer
4 hours ago
@Dheer - Sounded like the OP was asking if he could go to the exchange and trade currency. Foreigners do that on the way in (USD to INR) and on the way out (INR to USD) and could gain or lose on the exchanges depending on what happens while they're there. Are you saying it's against the law for locals to do the same thing?
– DSway
4 hours ago
add a comment |Â
3
Fx trading is illegal in India. Rupee is convertible on current account and not on capital account. An FX trading can create an obligation that can potentially lead to a loop hole of moving funds from capital account to outside India
– Dheer
4 hours ago
@Dheer - Sounded like the OP was asking if he could go to the exchange and trade currency. Foreigners do that on the way in (USD to INR) and on the way out (INR to USD) and could gain or lose on the exchanges depending on what happens while they're there. Are you saying it's against the law for locals to do the same thing?
– DSway
4 hours ago
3
3
Fx trading is illegal in India. Rupee is convertible on current account and not on capital account. An FX trading can create an obligation that can potentially lead to a loop hole of moving funds from capital account to outside India
– Dheer
4 hours ago
Fx trading is illegal in India. Rupee is convertible on current account and not on capital account. An FX trading can create an obligation that can potentially lead to a loop hole of moving funds from capital account to outside India
– Dheer
4 hours ago
@Dheer - Sounded like the OP was asking if he could go to the exchange and trade currency. Foreigners do that on the way in (USD to INR) and on the way out (INR to USD) and could gain or lose on the exchanges depending on what happens while they're there. Are you saying it's against the law for locals to do the same thing?
– DSway
4 hours ago
@Dheer - Sounded like the OP was asking if he could go to the exchange and trade currency. Foreigners do that on the way in (USD to INR) and on the way out (INR to USD) and could gain or lose on the exchanges depending on what happens while they're there. Are you saying it's against the law for locals to do the same thing?
– DSway
4 hours ago
add a comment |Â
user5011 is a new contributor. Be nice, and check out our Code of Conduct.
user5011 is a new contributor. Be nice, and check out our Code of Conduct.
user5011 is a new contributor. Be nice, and check out our Code of Conduct.
user5011 is a new contributor. Be nice, and check out our Code of Conduct.
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