Question

indian rupee has been depreciating in recent time .what effect will it have on the current accout deficit​

Answer 1

Answer:

current account deficit

Explanation:

Depreciating Indian rupee can create concerns for Current Account Deficit (CAD).A weak rupee against the dollar makes imports costlier. Some imports cannot be cut down such as oil, which can negatively affect India's current account deficit.

Answer 2

The depreciation of the rupee causes the rupee to lose value. This means more rupees are needed to trade with a dollar. The majority of international trade takes place in US dollars. So this can create problems for international trade (imports particularly)

Explanation:

• The "deficit in the current account" is a measurement of trade in a nation in which its imported goods'/services' value is greater than that of its export value of goods/services,
• "Current account deficit (CAD)" problems can occur with depreciating rupee. A weak rupee as against the dollar makes imports more costly. Many imports, including crude oil, cannot be minimised & may adversely impact the "current account deficit" of India.
• Increased oil prices can aggravate the current-account deficit problem in conjunction with depreciating rupee. It presents a risk of inflation and as the currency depreciates, imports become more costly. Costlier oil means more expensive vegetables and food, as transport costs increase.

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Difference between trade deficit and current account deficit - Brainly.in

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