Rupee Depreciation: A Boon or Bane?


Bangalore: Though the battle between Rupees’s depreciating value against Dollar was on for a long time but the weakest fall was at 55.26/27 per dollar as since November 29. Now Angel Broking stated with its currency reports that Indian rupees is expected to depreciate more due to mixed global market trends.

On one hand where it is considered as an alarming situation for the Indian economy, on the other few consider it to be beneficial in the long run. Government is taking up different measures to boost up trades and facilitate capital inflows to control the possibility of inflation.

The steps taken include hike in FII investment, limit in debt securities, enhancing ceiling for ECBs between 3-5 years maturity, high interest rate ceiling for foreign currency, NRI deposit and deregulation of interest rates on rupee, denominated NRI deposits.

According to International Monetary Fund (IMF) representative Arvind Virmani Depreciation in rupee is not a bad news for the Indian economy, though it will have some implications for the industry. "I don't think depreciation of rupee hurts the Indian economy. When we have slowing economy and rupee depreciates, it is positive for India," as quoted by PTI.

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