1. In terms of general currency appreciation and depreciation, the RBI controls volatility while the general rate is determined by the supply and demand of rupees in the market. There are non-regulatory ways of increasing/decreasing demand for rupees eg. by increasing imports/exports.
2. 1 INR = 1 USD is a big if, and very optimistic. If that were to happen slowly and gradually, it would be very good for the Indian economy. Now for the second part- in my opinion, it depends on how you look at it. Long-term appreciation is good but depreciation is bad.
This is such a well-written explainer! The way you tied exchange rate concepts to things like iPhones, study abroad costs, and even our kirana store bills makes it super practical. Currency moves aren’t just headlines they hit our wallets and jobs. Loved the balance between macroeconomic factors and real-life impact. More of this, please!
1. Is RBI regularisation the only way to appreciate or depreciate our currency?
2. What if slowly and gradually 1Rs becomes 1USD one day? Only sudden fluctuations are bad right?
Hi Sreyus,
1. In terms of general currency appreciation and depreciation, the RBI controls volatility while the general rate is determined by the supply and demand of rupees in the market. There are non-regulatory ways of increasing/decreasing demand for rupees eg. by increasing imports/exports.
2. 1 INR = 1 USD is a big if, and very optimistic. If that were to happen slowly and gradually, it would be very good for the Indian economy. Now for the second part- in my opinion, it depends on how you look at it. Long-term appreciation is good but depreciation is bad.
I hope I could answer your questions :)
This is such a well-written explainer! The way you tied exchange rate concepts to things like iPhones, study abroad costs, and even our kirana store bills makes it super practical. Currency moves aren’t just headlines they hit our wallets and jobs. Loved the balance between macroeconomic factors and real-life impact. More of this, please!