Rupee Depreciation
A fall in the rupee's value against another currency, so more rupees are needed to buy the same foreign amount.
Formula
Depreciation % = (New Rate - Old Rate) / Old Rate x 100, quoted as rupees per unit of foreign currency
Unit
%
In depth
Depreciation helps exporters and companies with dollar revenue while hurting importers, companies with foreign currency debt, and anyone funding overseas education or travel. It also feeds inflation through imported goods, particularly crude oil, which is why the Reserve Bank cares about it beyond the currency market itself. Over long periods the rupee has depreciated against the dollar roughly in line with the inflation differential between the two economies, which is what purchasing power parity predicts. For Indian investors holding foreign assets, depreciation adds to rupee returns, which is a real and often overlooked component.
Worked example
A move from 83.00 to 87.15 over a year is a 5% depreciation. An Indian holding a foreign asset that returned 9% in dollars earns 1.09 x 1.05 - 1 = 14.45% in rupees.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Rupee Depreciation” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.