It is known as the depreciation of the rupee. If a rupee demand falls, then the value of the rupee decreases. When the demand for the currency (rupee) increases, then the value of the rupee also increases, known as an appreciation of the rupee. The demand for the Indian rupee and other countries’ currency impacts the currency’s condition and determines the rupee’s value. Meaning of the Indian Rupee and its Weakness The Reserve Bank organises money in India and plays a crucial role in currency management founded on the Reserve Bank of India Act, 1934. The Reserve Bank of India governs the department of print and issuance of the currency. The rupee is subdivided into 100 paise however, in 2019, coins of the denomination of 1 rupee were the shortest. The code of the Indian rupee is INR it is the authorised currency of the country. India needs to increase its exports, support entrepreneurship and increase government spending. This can dampen inflation and strengthen Indian Rupee. Furthermore, exports increase because the product is cheap. However, moderate inflation would mean that consumers are more likely to spread and participate in the economy. Inflation does not positively impact the country’s poor population as food becomes more costly. As a result, the prices of commodities in the Indian market increase. Thus, the value of the Indian rupee decreases. The main reason for the weakness of the Indian rupee is the increasing trade deficit, lack of trust by foreign investors and contraction in the stock market. The Indian currency is called the rupee and the value of the rupee is affected by various factors like inflation rate, foreign exchange system, etc. There are various reasons why the Indian rupee falls.
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