Foreign Exchange Rate in India is on the rise recently. What impact is it likely to have on exports and how?
Foreign Exchange Rate in India is on the rise recently. What impact is it likely to have on exports and how?
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Rise in foreign exchange rate means that one unit of foreign currency is worth more rupees than earlier. So one unit of foreign currency can now buy more goods and services from India. It makes Indian exports cheaper to the foreign buyers. This is likely to increase exports.
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When price of foreign currency rises it makes exports cheaper. This leads to rise in demand for exports. As a result supply of foreign currency rises.
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