A Study on Indian Rupee’s Devaluation Relative to other Currencies
Keywords:Indian Rupee’s Devaluation, Indian Economy, Monetary Policy
Both positive and negative effects are seen throughout the economy of India as an impact of the devaluation of the Indian currency. The Indian Rupee is said to have been devalued when its value is reduced in relation to that of other currencies. The government is responsible for devaluing currencies. First implemented in 1966, the rupee’s value against the US dollar was devalued by 57 percent, from Rs. 4.76 to Rs. 7.50. When measured against the United States dollar, the value of the rupee was devalued by further 19.5 percent, from Rs.20.5 to Rs.24.5, in the year 1991. In this paper, an effort is made to evaluate the possible reasons for the devaluation of the rupee and an analysis is performed to determine the impact that currency devaluation has had on the different sectors of the country.
Have you ever noticed that the price of gold has increased significantly over the past decade? Ten years ago, the price of gold (for 10 grams) was 16320 Indian rupees, but as of the 18th of October 2020, the price of gold has increased to 52385 Indian rupees. One of the primary reasons for this is devaluation; when a country’s devaluation loses rate, the inflation rate rises, which in turn causes the price of commodities to rise. This also makes imports more affordable, which is a disadvantage for Indian exporters; as a result, the primary emphasis of our research is on the factors that contributed to the devaluation of the currency and the measures that may be taken to prevent further devaluation of the currency.
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