The conversation between human and AI assistant.
How does the change in Indian currency affect Indian economy?
That makes sense. What about the impact of a depreciating currency on imports?
Depreciation of the Rupee can make imports more expensive, leading to a potential rise in import costs for essential goods such as oil or capital goods. This, in turn, can lead to higher inflation, since consumers will have to pay more for goods and services, leading to a reduction in purchasing power. However, this can also have positive impacts on the domestic economy, such as incentivizing domestic production, reducing dependence on imports and developing self-reliance.