What is the reason for the depreciation of the rupee against the dollar?

Some of the reasons behind depreciation of rupee against the dollar are rise in crude oil prices, monetary policies of Fed, balance of payments, inflation, currency wars, foreign direct investment, foreign portfolio investment, government debt, political stability, recession, etc. You can read about the Balance of Payment Crisis, 1991 – Causes and Measures to Control it in the given link.

Recently, due to an increase in global oil prices, the import bill has been increasing. There could be tightening of monetary policies by global central banks. These are the latest reasons behind depreciation of rupee against the dollar.

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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