BANKING GENERAL KNOWLEDGE
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Only I
|
|
|
Only II
|
|
|
Only III
|
|
|
Both I and II
|
Detailed explanation-1: -On the contrary, appreciation of currency refers to an increase in the value of the currency. Hence, Rupee appreciation will imply the strengthening of the Rupee against the dollar. Example: If the value of 1 U.S dollar decreases from Rs 75 to Rs 70, the change will be termed an appreciation of the Rupee.
Detailed explanation-2: -A currency is said to appreciate when the base currency becomes more expensive in the currency pair w.r.t. quote currency. So for the USD/INR pair where $1 = Rs. 75 previously and now is $1 = Rs. 76, the Dollar is said to have appreciated w.r.t. Indian rupees.
Detailed explanation-3: -The Indian Rupee depreciated by around 10% against the US dollar and the rupee was the worst-performing Asian currency in 2022. This decline was mainly on account of appreciation in the US currency on safe haven appeal amid fears of recession and inflation across many parts of the world and Russia-Ukraine war.
Detailed explanation-4: -During 2021-22, as the trade deficit widens, the current account balance recorded a deficit of 1.2% of GDP (Source: RBI). India faces a trade deficit (When the import of goods and services is more than the export of the same), due to which the rupee has gradually depreciated.