- May 16, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Why in the news?
The rupee’s depreciation against the US dollar may hold little upside for India as exports seem unlikely to benefit.
- Global supply chain constraints -Lockdowns in China aimed at containing the Covid spread have slowed operations at key ports and affected global supply chains.
- Fall in currency values of competitors-Most of our competing export nations are in South Asia or Southeast Asia and their currencies have also depreciated
- High commodity prices and inputs
Impact of depreciation:
- Rise in import and current account deficit
- The depreciation of the rupee is also set to make outward remittances,
including those to students in the US, more expensive.