Login With Google
Fall in Rupee
Why is it in news?
- The rupee declined by 23 paise to close at a two-month low of 74.10 against the U.S. currency.
Details:
- The rupee breached the 74 level for the first time since August 26.
- On 28 October, the rupee had depreciated by 16 paise.
- Investors cut riskier bets after the imposition of fresh lockdowns in Europe to control resurging COVID-19 cases.
General Consequences of Fall in Rupee Value:
- Inflationary Pressure: It leads to higher landed cost for commodities imported into the country. Ex. Crude oil and Gold.
- Increase in Exports: On the other hand, fall in rupee make Indian products cheap and increases export revenues in rupee terms.
- CAD: The decline in value may also lead to widen India's current account deficit further (CAD).