Q.3 What are the factors responsible for the recent fall in the value of rupee? Why intervention in the foreign exchange market by the RBI is unlikely to yield the desired results? (10 Marks)

Mentor’s comment-
  • https://www.financialexpress.com/opinion/the-heat-is-on-hard-to-see-when-the-pressure-on-the-rupee-will-ease-despite-rbis-efforts/2585524/
  • In the intro, mention the rupee touching the lowest ever value in recent times.
  • In the body, mention the factors such as rising inflation in the US, rising oil prices, withdrawal of investment from equity market, decreasing forex etc. In the next part mention challenges such as fear of the US fed increasing rates and oil prices driving factors behind the value of rupee and therefore reducing the effectiveness of the RBI intervention.
  • Conclude by mentioning the need it is hard to see when the pressure on the rupee will ease, despite RBI’s best efforts.
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believing is seeing
believing is seeing
2 months ago

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