Consider the following statements:
1. Rise in inflation with significant impact on purchasing power of consumers.
2. Increase in borrowing costs for Indian firms abroad.
3. Exporting goods becomes cheaper and more competitive globally.

How many of the statements are correct with respect to the rupee declining against the US dollar?
(a) Only one
(b) Only two
(c) All three
(d) None

Question

Consider the following statements:
1. Rise in inflation with significant impact on purchasing power of consumers.
2. Increase in borrowing costs for Indian firms abroad.
3. Exporting goods becomes cheaper and more competitive globally.

How many of the statements are correct with respect to the rupee declining against the US dollar?
(a) Only one
(b) Only two
(c) All three
(d) None

ONLiNE UPSC · Accepted Answer

Statement 1 is correct: For consumers, a weaker rupee translates into higher costs for imported goods, such as fuel and electronics, potentially raising inflation and eroding purchasing power.

Statement 2 is correct: Investors might also feel the pinch, as depreciation can affect market sentiment and increase borrowing costs for Indian firms abroad.

Statement 3 is correct: Exporters often benefit from a weaker rupee, as their goods become cheaper and more competitive globally.

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Impact of Rupee Decline against US Dollar

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M Question 1	⏱ 0
Consider the following statements: 1. Rise in inflation with significant impact on purchasing power of consumers. 2. Increase in borrowing costs for Indian firms abroad. 3. Exporting goods becomes cheaper and more competitive globally. How many of the statements are correct with respect to the rupee declining against the US dollar? (a) Only one (b) Only two (c) All three (d) None