***********REVISE AGAIN******8 -----------What is ×Rupee Appreciation and Rupee Depreciation ? What is meant by ×Rupee Depreciation and Rupee Appreciation ? Now we will try to understand what is appreciation and depreciation refers to when we read such news on daily basis. Let us assume that in case, you go to a bank and asks the bank that you intend to buy US$100, please tell me what is the amount of INR you have to pay. Bank informs you that you need to pay Rs 5410/-. This means you can buy US$ @ Rs.54.10 per dollar. This is the selling rate of the said bank for US $ for that day. Now after one month, you go to bank and again ask the bank that you wish to buy US$ 100, and bank tells you that this time you have to pay Rs.5490. This means you have pay more to receive the same amount of US $. This means the local currency has depreciated. This will be known as ×Depreciation of Indian Rupee. In the above example, it is clear that value of INR has gone when compared to US$. On the other hand, if the rate quoted by bank on second occasion is say Rs. 5380/-. It will be considered as appreciation of INR as this time you have to pay less amount to buy the same amount of US$. -----DOLLY
Posted on: Thu, 11 Sep 2014 07:39:08 +0000
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