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Tuesday, 26 June 2018

Negative and Positive impact when Dollar rises against Rupee

Rising dollar against rupee means depreciation of rupee:

Disadvantage:

Rising dollar (depreciation of rupee) against rupee is bad for import based industry. There are some imports which cannot be cut e.g Oil. Oil price will be inflated and due to this prices of various products will be inflated. As price will increase , demand will start to decrease as law of demand states. There may be some goods , demand of which may not decrease. It will depend on type of elasticity. Overall result will be reduced demand and low investment further. It will impact GDP growth.

Advantage:

Advantage is not for an economy . This advantage is for exporters but benefit cannot recover the loss. Exporters will recieve more rupee than earlier against exports.

India's tourism industry will get benefited because low rupee will attract more foreigners in India.


Overall impact of falling rupee against other currencies I.e dollar is negative.

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