Rupee hits fresh low


The article reports the steep fall in value of Indian Rupee against major currencies, particularly against the dollar, Euro in particular. The depreciating pressure on INR / USD Exchange rates has resulted from the increasing crude oil prices and the resulting CAD ( Current Account Deficit). The Central Bank of India is planning on using Dollar reserves and other measures to stop this steep depreciation of the Indian Rupee.


The topics covered are determinants of Exchange Rate, Effects of Inflation and Interest rates on Exchange rates. Explain using the Exchange Rate diagrams.


Evaluation will include the short term and long term effects of depreciation on Current Account , Balance of payments , Exporters, Importers, Consumers, workers, domestic producers and Government.