Currency crisis

DMPQ- . Throw light on the implications of rupee depreciation on Indian economy.

. First, India’s imports comprises of essentials such as crude petroleum, machineries and  fertilizers which become expensive raising their prices facilitating ‘import’ of inflation.  India is very susceptible to a stubborn and sticky inflation. It hurts the masses in terms of  across the board higher prices. All imports become expensive including raw materials, goods and machineries which  further push up domestic costs. It brings with it negative sentiments in the economy,  makes investors cautious weary of investment and consumers’ reducing spending in the  economy. Thus, growth takes a down turn. Negative sentiments and capital outflows impact the stock markets, which ... Read more