Sarthaks Test
0 votes
56 views
in Economics by (22.3k points)

What do you understand by the devaluation of rupee?

1 Answer

0 votes
by (15.5k points)
selected by
 
Best answer

Devaluation of Rupee refers to the fall in the value of rupee in terms of foreign currency. This means that the value of rupee has fallen and value of foreign currency has risen. Specifically, it implies deliberate official lowering of the value of the country's currency with respect to the foreign currency. Devalutaion prevails under the fixed exchange rate regime. It means that now (after devaluation) one US$ can be exchanged for more rupees. This encourages exports and discourages imports as the former is cheaper now for foreign countries and the latter is expensive for Indians.

Related questions

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.

Categories

...