The IMF, however, warned that the rupee depreciation would jack up the prices of imported goods such as oil and petroleum products, potentially putting an upward pressure on inflation.
IMF spokesperson Gerry Rice said the currencies of many of India’s trading partners, including those in the emerging markets, too have depreciated against the dollar.
“As a result, so far this year the real effective depreciation of the Indian rupee compared to December 2017, by our estimates, is between six and seven per cent,” Rice said.
The real effective exchange rate (REER) is the weighted average of a country’s currency in relation to an index or basket of other major currencies, adjusted for the effects of inflation.
The Indian currency has since the beginning of the year lost almost 13 per cent in value vis a vis the US dollar.
He was responding to a question on the fall of the Indian currency in the last few months.
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