Ok so I'm from India, and a big headline that's been floating around the past few days is about how the INR has reached a record low against the USD.
Now I get the frustration of the people of how the country is growing and getting better, but then why is the currency getting weaker?? It's gotten devalued by nearly 30% in the last 10-15 yrs (I haven't taken inflation and stuff into acc, just the price difference from when i was a kid and now, so dont quote me on this)
The thing is, I thought that a developing country, which wants to be a manufacturing hub, and a major exporter, needs a devalued currency, so that's kind of necessary, cauz otherwise the developed countries won't outsource stuff cauz there's no benefit(not cheap).
I'm not an econ guy at all, this is just my basic understanding and what I've learnt from here and there, soo….. help me understand what does it mean for the country if it keeps getting devalued??
What does it mean for the country if it's currency keeps getting devalued??
byu/Hitman007gdghs inAskEconomics
Posted by Hitman007gdghs
1 Comment
India’s central bank has a 4% inflation target while Western currencies tend to have 2% inflation targets. This should, over the long run, lead to continual devaluation of the rupee relative to lower inflation currencies.