Depreciation of Indian Rupee has only negative impact on the economy
Due to European financial crisis the value of Rupee has been depreciated which has resulted in an increase in the value of dollar. Thus, affecting the economy. this has led to the increase in the demand of dollar in contrast to the Rupee and has led to the less growth of our economy in respect to the economy of the western countries.it has also led to the depreciation of our purchasing power in compared to the western world. the main effect of this has been the rise of inflation in our economy and its stagnant growth.dollar as expected is being appreciated among all the all currencies including rupee and has marked an increase in its buyers.these frailties and and volatility is sure to have an impact in the entire Asian market especially in our nation “INDIA”.
since the government would have to pay more in terms of rupee for its imports. this would lead to rise in fiscal deficit which in turn will raise the level of inflation.
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