The value of the indian rupee continues to decline..!?

The value of the indian rupee against the US dollar has been experiencing a sharp decline for the past few days. On november 20, the value of one US dollar in indian rupees was 84.39 rupees. This means that we have to spend 84.39 rupees for one US dollar. This will have a big impact on the indian economy, especially on indian exports and imports. Experts in this field say that the value of the indian rupee will continue to decline in the coming days. The presidential election in the united states was recently concluded. Donald Trump, who contested this election on behalf of the Republican Party, has won. He will take office as the US President for the second time in January. It is said that the US may increase the import duty on Chinese goods by 60% immediately after taking office. Donald Trump, who has accused china of engaging in unfair trade practices, is said to be taking such a step to reduce the trade gap. Increasing import duties on Chinese goods will cause the value of the Chinese currency, the yuan, to continue to fall.
When looking at the impact of this trade conflict between the US and china on india, especially on the value of the indian rupee, there is a huge trade deficit between india and China. That is, we import a large amount of goods from china, but the value of the goods we export is very low. india needs to correct this deficit between its exports and imports to promote domestic production and prevent dependence on imports. Perhaps when the Chinese currency depreciates, indian goods may appear to have less value in the external market, so the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india believes that India's exports will increase. Therefore, they say that as the value of the indian rupee depreciates, exports will also increase in India. But at the same time, when the value of the indian rupee depreciates, the price of goods that we can import from abroad will definitely increase, for which it is said that the Reserve bank will use its foreign exchange reserves to correct the deficit. For india, the value of imports in the financial year 2023-24 is 854. 8 billion dollars, and the value of exported goods is 776.7 billion dollars. It is said that the value of the rupee must depreciate to overcome this trade deficit in India. However, this will increase the value of goods purchased using the US dollar.
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Sowmiya Sriram

21/11/2024 10:42 AM