Indian Rupee Fall & Its impact On Indian Economy [ Must Prepare Topic ] – Hello friends welcome To Studydhaba.com . Here We are sharing one Of the Most important topic for UPSC prelims and Mains Exam.
Recently rupee witnessed a significant depreciation in its value. It’s value against the dollar has fallen by more than 5% since the start of 2018 and the fall is continuing to gain momentum.
India is not the only country to face currency depreciation, but also others like Indonesia, Argentina, Mexico, and Turkey.
Why This Topic is in News and how Much value Of Rupee Fall
- Since Start Of 2018 Indian Rupee value fall More Than 5 Percent Against US Dollar.
- This is the huge Fall Of Indian currency against Dollar In Recent Time.
- Indian currency is Not Only current Which face depreciation in Recent Time .
What Are The Main Causes of depreciation
US federal Reserve = tighten Monetary policy = Less Dollar Supply In International Market = More Demand For Dollar In International Market = Less demand for Other country Currencies
Impacts on Indian Economy
- High Cost For Oil Import
- current Account deficit
- Corporate Revenue Loss
- Less Foreign Investment
- Unemployment Will Increase
what we can do or Way Forward for Indian Economy
- To solve the currency problem, Reserve Bank of India (RBI) can influence the value of rupee through effective regulation of money supply through its monetary policy stance.
- Benchmark interest rate can be used effectively to attract the foreign capital into the country and in result increasing the value of the currency.
- Direct intervention of RBI in the forex market can also help reduce the selling pressure on the rupee
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