Focus

• UPSC, when asking about currency appreciation and depreciation, will be checking whether an aspirant has understood the concept.

Concept

• If the value of the rupee against 1 dollar was 80 last year and it is now 90, it means the rupee has depreciated. It means the rupee is losing its value relative to the dollar.
• If the value of the rupee against 1 dollar was 80 last year and it is now 70, it means the rupee has appreciated. It means the rupee is gaining its value relative tothe dollar.
• Will depreciation/appreciation of currency be of advantage to importers? Please think about this question. We will try to explain this question in tomorrow’s notes.
•  Sometimes countries depreciate their currency to boost exports. YES/NO.

Source: The Hindu