Devaluation of Indian Rupee against Dollar
You might have seen news headlines “Indian rupee falling” or “Rupee falls to Rs.65 against US dollar”. Have you ever wondered why rupee is falling? Who fixes the value of India rupee? Let’s us discuss in this post a brief history of Indian rupee against dollar from 1947 and also its main causes and effects. What is Devaluation? it refers to decline in the value of a currency with respect to other countries, which is most of the times brought by central bank. It should not be confused with term depreciation of currency which is decline in currency value due to market forces without interference of government. Devaluation means officially lowering the value of currency in terms of foreign currencies. There could be many motives of the devaluation. It stimulates exports of commodities. It restricts import demand for goods and services. It helps in creating a favourable balance of payments. Almost all the countries of the world have valued their currencies at one time or the othe...