The rupee effect

The trade data for May has shown up divergent trends, depending upon the currency used to analyse the trends. The dollar value of both exports and imports is contracting, while in rupee terms growth is in double digits.

The key is the value of the rupee, which saw its sharpest depreciation in the year in May—making exports cheaper and imports costlier. The question is whether this sweet spot will hold up.

WATCH VIDEO

The fall in India’s currency is causing a divergence in trade data, with dollar values of imports and exports shrinking, even as they expand in rupee terms. Mint’s Anil Padmanabhan looks at what this will mean for the economy

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Also See | The rupee effect (PDF)