India rupee appreciation/depreciation factors
- August 10, 2020
- Posted by: OptimizeIAS Team
- Category: DPN Topics
The Indian currency is trading relatively weaker compared with emerging market peers such as the Brazilian real and the South African rand
- Currency appreciation is an increase in the value of currency comparing to another currency.
- Currency depreciation is an opposite of currency appreciation, it is a fall in the value of a currency.
- Numerous factors determine exchange rates.
- Many of these factors are related to the trading relationship between the two countries.
- Exchange rates are relative, and are expressed as a comparison of the currencies of two countries.
- The following are some of the principal determinants of the exchange rate between two countries.
- Differentials in Inflation
- Differentials in Interest Rates
- Current Account Deficits
- Public Debt
- Terms of Trade