Question

"Indian rupee plunged to all time low of Rs. 74.48 against the US
dollars($)." In the light of the above report ,discuss the impact of the situation
on Indian Imports, Exports and BOP position of India.

Answer 1

Answer:

1. Exports will increase.
2. Imports will decrease
3. Receipts in BOP account will be more than payments.

Explanation:

Since the Indian rupee has hit the low,this means that it has depreciated against the US dollar.

So,the Indians goods and services will be cheaper for the foreigners,this implies that the exports will increase,whereas the foreign goods and services will become expensive for Indians,hence imports will decrease.

in BOP account,receipts will be more than payments,because exports are more than imports.

So, credit side will be more than the debit side.

Hope my answer helps you!!