Increasing tariffs may not be an effective solution to curb the rupee’s weakness
Some other options that the government may have to choose from to deal with the rupee's depreciation are increasing interest rates or opting for foreign bonds/NRI bonds to shore up the country's forex reserves
The government plans to increase import duties on a few non-essential items such as gold, electronics and steel, to provide some support to the depreciating rupee. Rising imports coupled with a weakening rupee would push the country’s trade deficit higher and consequently worsen the current account deficit. The question now is whether import duty hikes would prove helpful in containing the rupee’s rout.
Login to enjoy exclusive benefits!
- Unlocked premium articles
- Personalized news
- Market Watchlist
- Insightful Newsletters & more