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The Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) has projected the Indian Rupee to stabilize in the range of ₹92-93 against the US Dollar.
This forecast is attributed to India's robust economic resilience and strong macroeconomic fundamentals.
The ability to absorb external shocks is highlighted as a key factor contributing to this stability outlook.
The exchange rate is the value of one country's currency in terms of another currency. For example, ₹92-93 per USD means 1 US Dollar can buy 92-93 Indian Rupees. Depreciation occurs when a currency loses value, making imports more expensive and exports cheaper. Appreciation is the opposite. Macroeconomic fundamentals refer to the underlying health of an economy, typically assessed by indicators like GDP growth, inflation, fiscal deficit, current account deficit, and foreign exchange reserves. Strong fundamentals indicate an economy's ability to manage internal and external shocks.
Simple Analogy: Think of a country's currency as its economic report card. If the report card (macroeconomic fundamentals) is strong, the currency (exchange rate) tends to be stable or appreciate, showing confidence in the country's economic performance.
An independent body constituted to advise the Prime Minister on economic and related issues. It analyzes any issue, economic or otherwise, referred to it by the Prime Minister and advises on it.
Rupee depreciation can lead to imported inflation, as goods bought from abroad become more expensive in local currency.
A weaker Rupee makes Indian exports more competitive globally but increases the cost of imports, impacting the trade deficit.
A stable and predictable exchange rate is attractive to foreign investors (FDI and FPI) as it reduces currency risk and provides certainty for returns.
Strong forex reserves provide the central bank (RBI) with the capacity to intervene in the currency market to manage volatility and support the Rupee.
GS Paper III: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Government Budgeting. Investment models.
General Awareness: Indian Economy, Economic terms and concepts.
General Awareness: Indian Economy, Monetary Policy, Exchange Rates, Economic bodies.
General Awareness: Basic Economic concepts, Government bodies.
Which one of the following issues the 'Global Economic Prospects' report periodically?
Answer: The World Bank
Consider the following statements: Statement-I: India accounts for 3.2% of global export of goods. Statement-II: Many local companies and some foreign companies operating in India have taken advantage of India's 'Production-linked Incentive' scheme. Which one of the following is correct in respect of the above statements?
Answer: Statement-I is incorrect but Statement-II is correct
Among the following, which one is the largest exporter of rice in the world in the last five years?
Answer: India
High for conceptual understanding in UPSC, medium for factual recall in SSC/Banking.
The value of one currency in terms of another.
A fall in the value of a currency relative to other currencies.
Key economic indicators reflecting the overall health of an economy.
When a country's total value of imports of goods, services, and transfers is greater than its total value of exports.