What are the causes of rupee depreciation?

There are varied reasons behind depreciation of rupee, they are: inflation, balance of payments, current account deficit, currency wars, capital inflows from foreign portfolio investors, foreign direct investment, prices of crude oil etc.You can read about the Balance of Payment Crisis, 1991 – Causes and Measures to Control it in the given link.

Other reasons could be strengthening of US Dollars, Government of India’s Government Securities Acquisition Programme (G-SAP) programme.

Further readings:

  1. Forex Reserves – Meaning, Importance, Advantages (Notes for UPSC IAS exam)
  2. New Economic Policy of 1991 – Objectives, Liberalisation, Privatisation, Globalisation

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