Question:medium
“Depreciation of currency may promote exports of a nation.”
Defend or refute the given statement with valid arguments.
“Depreciation of currency may promote exports of a nation.”
Defend or refute the given statement with valid arguments.
Defend or refute the given statement with valid arguments.
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Currency depreciation can benefit exports but may lead to higher import costs and inflation.
Updated On: Feb 9, 2026
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Solution and Explanation
A currency's depreciation lowers export prices in foreign currency, enhancing global competitiveness. This surge in export demand improves a country's trade balance. Conversely, it can escalate import costs, potentially triggering domestic inflation. For instance, a depreciating Indian rupee makes Indian products more affordable for US consumers, thereby boosting export volumes.
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