Rupee becomes fourth-worst performing Asian currency as it depreciates 5% this year
GS3Economy · S&T · Environment · Security· Growth, inflation & macro indicators· Prelims·
Currency volatility and depreciation: a key GS3 Economy topic regarding exchange rates and external shocks.
Why in news
The Indian rupee depreciated by 5% this calendar year, ranking as the fourth-worst performing Asian currency according to Bloomberg data.
Background
The Indian rupee fell 5% this year, while the Indonesian rupiah fell 7.3%, the South Korean won gained 8.5%, and the Chinese yuan gained 4.6%.
Facts for Prelims
- FactIndian rupee depreciation: 5% in the current calendar year
- FactIndonesian rupiah depreciation: 7.3% in the current calendar year
- FactSouth Korean won appreciation: 8.5% in the current calendar year
- FactChinese yuan appreciation: 4.6% in the current calendar year
- FactBrent crude price benchmark: near $105 a barrel
Prelims practice question
What was the depreciation percentage of the Indonesian rupiah in the current calendar year?
- (a)7.3%
- (b)5.0%
- (c)4.6%
- (d)8.5%
Show answer
Answer: (a) 7.3% — The note states that the Indonesian rupiah fell by 7.3% this calendar year.
For Mains
Q. Analyze the factors contributing to the depreciation of the Indian rupee and discuss the effectiveness of RBI interventions in managing currency volatility.
Dimensions to cover in your answer
- External shocks: Impact of high Brent crude prices on the current account deficit
- Capital flight: Influence of foreign portfolio investment (FPI) outflows on currency stability
- Monetary policy trade-offs: Balancing inflation control with currency depreciation management
Keywords: Currency Depreciation · Foreign Portfolio Investment · Current Account Deficit · Monetary Policy · External Shocks
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This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.