recently govt. of India had devalued rupees how will affact the economy of India? it is also not good to devalue it so much?
The prices of basic commodites have also risen how it affacts economy and the people?
1. Devaluation of domestic currency leads to boost to exports as the domestic goods have becomes relatively cheaper for foreigners. This leads to increase in economic growth.
Excessive devaluation is bad for the economy as imports become expensive. This is particularly dangerous when the imports consist of essential commodities or necessity goods, such as food grains, oil, medicinal drugs, etc.
Excessive devaluation is bad for the economy as imports become expensive. This is particularly dangerous when the imports consist of essential commodities or necessity goods, such as food grains, oil, medicinal drugs, etc.