Currency Appreciation & Depreciation - How it Affects the Economy | Economics

In this video we will learn what is Rupee appreciation and depreciation. It is also referred to as currency devaluation and revaluation. You must have read it in the newspaper that rupee has become stronger or weaker or crashed or gained some points against the American dollar. All of this simply means that the value of rupee has either increased or decreased against the American Dollar. This topic is part of Macroeconomics. Currency Appreciation & Depreciation has a huge affect on a nation's economy. It drives Foreign Direct Investment FDI, increases foreign reserves and it also affects a country's import and export.
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[@amitsengupta01]

The part where I said "GST reduced the money supply in the economy". Actually I meant demonetization and not GST. Apologies for the glitch. If you did catch the mistake, you are on a right track!

[@rgarg303]

Sir please complete 11 class geography ncert remaining chapters soon...

[@yogarajat1136]

Thank you for the clarification.

[@sodiumchloride7472]

Yes I caught 🤗

[@suryanarayansahu2987]

Yess sir, That's why I was replaying that GST term in that video again and again.😛😛.. Thank you sir...

[@goodluckyadav630]

But again who are going to investment in #FDI every foreign customer invest in #FII as per government data?....what happened in this situation?

[@nevilnevs]

@ 3:50 1$ = 63.81 rupees and 1$ = 63.51 rupees Foreigner get more rupees per dollar when 1$ = 63.81 and not @ 63.51

[@tejailla7431]

Yeah...There is a mistake in that!!!

[@divyanshsingh308]

Exactly

[@DurgaPrasad-fo9iu]

This point confuse and disturb whole.video

[@barshavalentine8687]

Thanks dear....this particular point was distrbng me a lot until I read yr comment

[@BlueCitySmiles]

Yup!

[@another8230]

It's so amazing that how could one man can explain the concepts Economics, History, Geography and Geopolitics very well and in a very subtle way. Thank you Amit Sir!

[@simeondias966]

Excellent.! I understood more in this 11 minute video than I have for a whole semester in college.

[@vladimirmodi41]

😁😆

[@raiarslan8333]

The master piece of economics Fundamentals is this Video.Hats off to u Sir

[@onarshquest]

2:56 Foreign Importers 4:20 We can export more By the way, I'm so thankful to you🙏🙂👍

[@rgarg303]

Sir, You work very hard before making any Video....full research...How to present...What mistakes others do that can be corrected....and also taking care of making it interesting not boring.......Amazing Sir...I appreciate...

[@tangadabu1532]

There are various factors which lead to fluctuation of rupee's value against the dollar. And this entire video was mainly focused on one factor I.e FDI&Fll. However, the explanation was very precise even though it has covered the single aspect of currency fluctuations.

[@GururajBN]

You never cease to amaze me. You write about science, technology, geopolitics, money market, geography, weapons systems, what else? 👌 You are a source of inspiration for people to seek knowledge, not just information.

[@nikitapathak9813]

I'm really grateful to you for explaining it in such a simple and knowledgeable way.

[@sakthikumar7475]

None can teach more effectively than this. Thanks a lot! :) Yes, it was indeed informative :)

[@nanu1358]

Your videos never disappoint me sir..your teaching skills are incredible😊

[@stutiba]

I am addicted to ur videos.. what an excellent teacher u r

[@saggyb9176]

Nice explaination, But same question amit ji, Import - export things are understood well, but Why will a foreigner invest when rupee appreciates ( at 3:45 ) Please explain, even many of your viewers have asked the same question and not being answered yet. Hope u will reply soon .😊 Thanks

[@furtherishere7568]

1$=70 or 1$=60, if rupee depreciate only ,foreign will benefit because they will get more rupee, I don't understand why u said foreigner will benefit only rupee appreciate, please reply me sir

[@harishganesh3647]

​@@furtherishere7568Exactly

[@thegameboy3507]

Please waych again

[@thegameboy3507]

Please watch again

[@damodharyadav5475]

Sir I think I never forget in my life,such a beautiful explanation sir

[@tirunagarisrilatha2562]

What a voice u have sir!......excellent Even ur explanation is also lucid....connected soooo many things... Tq for the effort.

[@harpreetsingh-xj2eb]

Your lectures are amazing ,thanks a ton sir, God bless you Keep on coming with new lectures especially in economics .... Once again thanks a lot sir

[@omkarsahu1804]

Too much information in one go but is good as you touched almost every aspect of rupee appreciation and depreciation. One has to look multiple numbers of times to understand the minute details.

[@manojakp8228]

I watch more than 7 time now I am crystal clear

[@lucianakale1132]

Thank you so much! This is well explained 😊

[@narendranaik3180]

sir there is one more glitch i guess ,or i may be wrong also.please check around 3:45sec to 3:50sec.please let me know

[@Asdfghjkl-w3j]

narendra naik, yes you are correct. I should be opposite

[@ziashaikh9988]

@@Asdfghjkl-w3j yes u r right bro

[@mayurinaskar5237]

Yes...its the opposite

[@levintilak738]

Also at 5:00 when ruppee appreciates, it will increase foreign investment. How?

[@AnuragKumar-go9io]

@@levintilak738 if they invest, they'll be earning in rupees and if value of rupee is strong against dollar, they'll get more dollar in exchange, as compared to when its value is low.

[@sagarbelwal2839]

This video is master piece

[@srin6977]

The best video i have ever seen.. the last 2 minute you did great job.Keep doing more macro economics videos.

[@amarmithare540]

I just the love way you explain sir it's amazing very informative..

[@vamsi1]

Nice explanation with Practical details 👌

[@jadhavaarthi571]

thank you very much sir,you're my best teacher that everything you teach is comprehensive and practical

[@divyasharma-ib7tz]

Thank you so very much! For explaining this in a such a easy manner. 🌻

[@CRAAZY_FAMILY]

Sir u mentioned that investors will invest when value of india rupee decreases!! So that they will get more rupee in fewer dollar but 1dollar= 63.81>>> 1dollar=63.51 So a foreign investor will be benefitial in 63.81 but why u mentioned 63.51

[@suraiaakter7810]

that is also my qustion here

[@abdullahayaseshan]

Let's understand it this way, if the foreigner wants to invest 1000 dollar in any asset in India, he will hold 1000/60.81 = 16.44 rupee worth of indian asset in 1 dollar = 6.81 rupee rate but when the value is less with same amount meaning at 1000 dollar it would be 1000/60.51 = 16.53 rupee worth of indian asset ... So ultimately he is holding more valued asset in indian rupee at the low value of rupee per dollar or more stronger rupee position. That's why he is willing to invest and can turn this investment in greater return in future. Remember 60.81/1(Rupee/USD) is the rate...

[@eshwarchandra3130]

Wow......excellent......now it all makes sense for me ......thanks a lot .....

[@MelchorMoore]

Very informative. Also, very easy to understand since this isn’t my field of study

[@udhaybalamurali8901]

Thank you so much sir, For me now it's not a hard trotting hard topic.

[@bheeshmarangu7628]

Man u make my life easy ❤

[@vilasagarampranay1703]

👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏Awesome Awesome nobody can explain in the country like you sir.I can hear your voice for whole day sir.

[@damewondkhar4322]

The content is so satisfactory

[@hemanthcv3877]

clear as a crystal. Thanks for the video❤️

[@boscomoons7742]

This was highly educative; thanks for the good work

[@somickroy5883]

The videos the like before I watch 🙏🙏🙏

[@SDD543]

I didnot understand how FDI would increase as rupee appreciates? Would not they (investors) have to pay more dollars to purchase rupee, making it expensive for them to invest? Please Explain.

[@goldenmart6320]

Hmm

[@dhanushyekkar6996]

If you are a American if you want to invest $10 in india, you will first exchange $10 with Rs500, (assume 1$ = 50 INR) And then want to invest INR500 in Reliance JIO. (Assume that the 1share vale of the company = 100 & you bought 5shares for 500) now the company at at its surplus profits you too got INR 1000 as dividends in subsequent years (now the shares have rised to 1share = INR 500) NOW you want to sell your share and you plan to take back all your investments&profit to your home country in the form of dollar. And now if the indian Rupees has appreciated its value i.e 1$ = 25Rs.. You would get 140$ For 3500INR (1000Dividend +2500Vale of shares sold =3500)(3500÷25= 140$) A huge profit for investing in developing economy. .. For 10 dollars you got 140 dollars..this is only possible if the value of indian Rs appreciates.. YOU must also note that If the Value of Rs is Appriciating and if it becomes equal to US dollar then you will not invest on india You will look into some other developing Country.. that is why India keeps on devaluing its Rupee Value against dollar by importing/investing in some other countries or borrowing loans which would impact on Indias economic growth & by that assuring that the availability of dollar is always less (simple economic law: when supply is less and demand is more then the price/Value of the commodity rises i.e, when the demand for dollar is high& supply is less you need to pay more INR to buy Dollars)it will also repeals/discourage invester to take back their investment whinch indirectly make indian Foreign Investment Stable... And other Advantages of devaluation of rupee aggainst foreign currency are It would directly Discourag domestic buyers from importing foreign commodities (You must pay more rupees for the dollar) For more Pros &cons www.economicshelp.org/blog/1299/economics/advantages-and-disadvantages-of-devaluation/

[@confucius1491]

Rupee appreciates....mean higher interest rate on loans by banks ( people go with less loans and. Thus less money in market and demand raises for rupee and value enhances )....mean higher interest on govt bonds and securities too.....now i ask you ....would you invest if you are going to get more interest?

[@confucius1491]

Basically a bank lend money either to govt for govt bonds and securities or to market people.....now if there is 8 percent interest on govt sec then bank increases interest rate of market loans say 12 percent....and thus this ultimately lead to inflation and hike in rupee demand and thus value.....now foreigners invest in govt securities due to much interest and secure too.

[@saadhassanshahid1673]

yes mam u r correct .after 1 year i m Commenting on ur comment,because i m studying this subject now only.My doubt gets cleared after reading the same doubts asked by u.

[@shreyahazra7226]

Thank you so much for the clear explanation. I have an exam tomorrow and I hope this helps :)

[@samedu5163]

Very Important concept are made clear in simplified and precise way... Thank you so much Sir for another fantastic video🌹🙏

[@harithakassireddy6412]

I came to now that, this is how our Indian economy works now, and the ideas towards FDI is good for short term but will effect in the long run.

[@anilkumar-vx7it]

Superb explanation by linking the concept with gst...

[@deepakchaudhary3061]

You are awesome man I was reading this topic just before your video .

[@Shwerinks1627]

One of the best explanation I have ever heard sir.... Your way of presentation makes the entire content to get stored in my brain without efforts.... Thank you... Looking forward for more videos..

[@manga1682]

Wow man, you did an excellent job,

[@theunknown8410]

Thanks you. You did a great job. 😊😊

[@nehakhansk]

Thank you 😢❤

[@mettleUnbeaten]

Excellent work sir! It helps me in understanding this falling/ depreciation/ appreciation of rupee, Possible goals of demonetization, Trade deficit, RBI's procedure to tackle the increasing demand of the US Dollar, and most importantly role of interest rates in an economy, etc in very easy language. Great lesson indeed! 👌

[@vishalsahu4233]

very fruitful video, everyone must watch!

[@monstarioyt4454]

3:53 you said that the foreigner would buy $1 = 63.51 while if it buys for $1 = 63.81 then he would be able to spend more Please reply

[@piyushagarwal2223]

The reason is foreign investment are of 2 types - FDI(Foreign Direct Investment) and FPI(Foreign Portfolio Investment). He is talking about FPI not FDI. In FPI foreigners invest in stocks, bonds etc. While in FDI they do direct investment in the country.

[@confucius1491]

Basically a bank lend money either to govt for govt bonds and securities or to market people.....now if there is 8 percent interest on govt sec then bank increases interest rate of market loans say 12 percent....and thus this ultimately lead to inflation and hike in rupee demand and thus value.....now foreigners invest in govt securities due to much interest and secure too.

[@muradorucov4825]

AMAZING explanation.

[@AkshatAnandsangfroid]

Excellent video! Now my each n every concept regarding effect of exchange is clear. Thanks a lot sir.

[@abrahamsaxah2379]

trust me, u are the best

[@starlightoceanyt]

Thanq ..for clear understanding 🔥

[@thepoonchcricket123]

Excellent and Well concluded.. Was difficult and your way of teaching made it so easy

[@divyasl7755]

Thanks lot .....very helpful .......😊

[@mr.jaankar8551]

It was hell informative.. thanks sir

[@maryelizebeth7409]

Knowledgeable one❗

[@BrainBoost962]

After watching this video one can really have crystall clarity as far as appreciation and depriciation of rupees are concerned.Really awsome work sir, a big thumps up.looking forward for some more interesting videos

[@lakshmin4809]

Awesome presentation sir.thanku so much sir

[@sumankapoor7682]

Ultimate explanation... Thanks

[@chanduuppu3159]

small doubt at 3:54 fdi comes when rupee appreciates or depriciates? I think it should be depriciated.

[@nkritu_0421]

Really thank you sir for such an information..

[@rgarg303]

Sir If possible... Please make some videos on Geography in Detail according to UPSC Syllabus mentioned in Optionals like Oceanography, Geomorphology, Climatology, Models & Theories etc.....

[@priteshbagal9176]

worth watching 💯✌️

[@aabidallaie252]

Nice explanation 💓💓💓

[@MSS_HariPrasathS]

Can someone explain what is happening from @3:20 to @5.35. Thanks

[@robertgriffin9244]

Best explanations for upsc and state psc's👌

[@sunilchanda1212]

amazing video. thank you for sharing :)

[@debasmitadas4775]

Your voice is power.

[@vrindhars8281]

Thanku❤

[@upsbakandhateliyanifatehpur]

Hello sir..This is KD sharma...this side...I want to ask about the concept at 3:50...why a foreingner will invest when money value is less...if 1 dollar=63.81...he should perchase because he would get more indian rupees ...

[@harithakassireddy6412]

Thank you so much for explaining us clearly.

[@aniketvaidya]

Excellent explanation Thanks a lot

[@onarshquest]

Im so thankful to you🙏

[@haknazarhallygylyjov3664]

Great explanation! Keep up the great work!!

[@monikakala4632]

Beautifully explained!

[@kathyjohans7842]

Superb...thanks a ton...

[@remankumar9684]

Super lecture great learning

[@vkmishra6582]

Awesome as always...

[@karanjitsingh9108]

So nice of u sir...

[@aatmikapuranik3244]

very informative video good research and job

[@pavithrav2256]

Very good explanation upload more thank u

[@reynukaarevathi8028]

Ur voice is superb

[@MKay10100]

This was very informative. Thanks :)

[@kanakarajuneeli9219]

Sir..as u said at 3:50..as a foreigner in fewer dollars you are getting more rupees? Wen the rupee value is less? How sir?

[@drshwetalihitkar580]

Nicely explained ..thanks :)

[@lidiya64728]

Huge thanks

[@sijasami3946]

thank sir for your hard work

[@vijekrishnan3293]

Hello sir, I have a doubt on how rupee appreciation helps to improve FDI. That means rupee value is less so they have to spend more dollars to get more Indian rupee. Clarify that part.

[@confucius1491]

Basically a bank lend money either to govt for govt bonds and securities or to market people.....now if there is 8 percent interest on govt sec then bank increases interest rate of market loans say 12 percent as more risk to recover money....and thus this ultimately lead to inflation and hike in rupee demand and thus value.....now foreigners invest in govt securities due to much interest and secure too.

[@sakshi_mishra07]

I watched the video just now and have the same confusion. If your doubt is clear by now (your comment is 3 years old) can you please help me out here.

[@artoutpoured]

Guys I have the same doubt😂, please help

[@naveenkuntal6481]

i have the same and one more @@artoutpoured

[@sagarbelwal2839]

Think of currency depreciation and appreciation from our nation's point of view. I think currency dep. for us is currency app. for them and vice-versa.

[@xtricksterx___1764]

Thanks sir

[@XYZ-c7q]

Indeed informative

[@askp1000]

Very informative video.

[@TTAK85]

Here is where I get confused as an investor I want my dollar to give me more of the other currency going back to the example @ minute 3:40 if i have 100$ i want to get 6381 rupee which is better for me than getting 6351 rupee but the example says investor prefers the 6351?

[@shaanikhan954]

Well done sir , very well explained b 🌹 , though I'm a economics graduated I do find it elaborative 🤭

[@udayakumarpv2583]

Many thanks sir

[@JPTVIDEOS4U]

Soooo good explanation . Sir can you please, make such videos topic wise for civil service gs prelim, and mains

[@august3106]

I think the explanation at 3:41 should like this you are getting more dollar from the investment profit in when you convert it back to dollar, since you are investing when it is appreciated you are not getting more rupee. Feel free to correct me

[@seemadwivedi4986]

Very useful video