Depreciation in foreign currency?

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Posted by Cbse Student 7 years ago
- 2 answers
Yogita Ingle 7 years ago
Depreciation of a currency is fall in price of domestic currency (say, rupees) in terms of foreign currency (say, dollar). It means one dollar can be exchanged for more rupees. Its implication is that with the same amount of dollars more of goods can be purchased from India. This means Indian goods have become cheaper for Americans. This may result in increase of exports from India to America. Thus currency depreciation takes place when there is an increase in the domestic-currency-price of the foreign currency. For instance, if the value of rupee in terms of US dollar falls, say from र 50 to र 51 to a dollar, it will be a case of depreciation of Indian rupee because more rupees are required now to buy one US dollar. In short, higher exchange rate like $1 = र 51 instead of र 50 means depreciation of Indian currency.
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Cbse Student 7 years ago
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