What is the weakening of the Indian Rupee due to administrative action known as?

Question of The Day11-05-2022

If the value of the Indian rupee weakens due to administrative action, it is called _______ of the rupee.

Answer

Correct Answer : b ) Devaluation

Explanation :

Recently, Indian rupee has depreciated to an all time low of 77.44 against the US dollar i.e. 1 USD is now equal to Rs. 77.44. Depreciation of Indian rupee implies that rupee has less value with respect to the dollar.

When the value of Indian rupee weakens due to administrative action, it is called devaluation of rupee while, when the value of Indian rupee weakens due to floating exchange rate, it is called depreciation of rupee. However, the impact of both depreciation and devaluation of Indian rupee is same.

Hence, option (B) is correct.

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